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German utilities RWE (RWEOY) and E.ON (EONGY) are heating up according to Goldman Sachs, which on Thursday tipped double digit share price increases over the coming year after a court ruled that the German state should refund billions of dollars in taxes to both companies.

Germany's constitutional court on Wednesday overturned a nuclear fuel tax introduced in 2010 and said that payments of more than €6 billion ($6.7 billion) by German utilities should be refunded.

E.ON said that it could reclaim about €2.7 billion, equating to about 14% of its market capitalization. RWE could reclaim about €2 billion, close to 17% of its market capitalization.

E.ON shares traded Thursday at €8.64, up 2% on the day and 14% over the past week. Goldman Sachs tipped the stock to hit €9.6 per share within 12 months.

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RWE shares climbed, up 1.2% Thursday to €19.77, taking its gain over the past week to just over 12%. Goldman Sachs upgraded RWE to buy from neutral with a price target of €22.80 per share and said the stock could hit €31.60 under its bull case scenario.

The higher price targets for both companies were largely predicated on the court ruling and expectations of a sharp decline in the amount of money the companies need to put aside to dismantle their nuclear power stations. Goldman also incorporated expectations of widely reported asset sales by both RWE and E.ON, which it said could further boost share prices.

RWE is said to be in talks to sell its renewables energy business Innogy (RWEOY) to France's Engie (ENGIY) , while E.ON was last week reported to be discussing the sale of its 46.65% stake in its fossil fuel unit Uniper (UNPRF) to Finnish utility Fortum (FOJCF) . None of the companies involved have commented on the talks.

Goldman said that the sale of Innogy would refocus the street on RWE's sum of the parts valuation, which is above current market capitalization, while it also expected "1H results (August 15) to trigger positive earnings upgrades as we are c.15% ahead of...consensus."

On E.ON, Goldman Sachs said the tax refund coupled with the sale of Uniper, probably in 2018, would allow for a rapid deleveraging and a new dividend policy. "By the end of (2020)...we expect E.ON would yield 5.5%," said the broker.