E - Eni: Ongoing Satellite Strategy Could Unlock Intrinsic Value

2024-02-21 14:10:03 ET

Summary

• Eni reported better than expected operating cash flow with a solid contribution from associates.
• Enilive could be the next growth driver, and a spin-off could be a positive catalyst.
• It maintains friendly shareholders' remuneration that combines a quarterly dividend and an ongoing buyback.
• Volume production upside thanks to M&A and organic growth.
• Its Capital Market Day is in mid-March. We recommend buying Eni ahead of the 2024 financial and operational targets.

Last week, Eni (E) reported its Q4 and Fiscal Year 2024 results. Our team has a long-standing buy rating for the major oil company. This is supported by 1) Plentitude upside confirmed , 2) Gas Diversification optionality, 3) the company's resiliency , and 4) Eni's capable exploration team. Looking at the recently released financial performance, operating earnings were 5% below Wall Street consensus. That said, numbers were in line, thanks to a solid earnings contribution from associates. Today, we decided to follow up on the company mainly due to the fact that Eni did not provide guidance in this release. More details are expected during the Capital Market Day in mid-March. The company's CEO had a lengthy interview with a major Italian newspaper, and taking advantage of our Italian team, we believe there is an economic moat to price in....

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