Eni: Same Strategy, Higher Payout, And Buy Confirmed

2025-03-06 09:25:12 ET

Summary

• Following the release of Eni Capital Market Day, we expect a positive reaction, thanks to the company lifting its CFFO payout ratio by 5pp and a plus +5% DPS.
• Given the fast progress made on the satellite strategy, we believe Eni should be less sensitive to Brent's price in both directions.
• Double digit return (dividend and buyback), discount vs peers and modest leverage make Eni a buy.

Oil Prices decreased in February 2025, with WTI crude declining from $72 to $70.3, as speculation of a Russia-Ukraine ceasefire dampened supply concerns. Since our last update (April-end 2024), Higher Outlook And Buyback Raise , Eni (NYSE: E ) stock price declined by almost 15% (Fig 1); between April 30, 2024, and March 5, 2025, the oil price fell by approximately 20.5%. That said, we believe Eni should be less sensitive to Brent's price in both directions, and this correlation is deteriorating over time, making the company a solid buy. As a reminder, our supportive overweight is based on 1) Eni's Gas Diversification with no reliability on Russian gas, 2) Ongoing Satellite Strategy Could Unlock Intrinsic Value , 3) Plentitude upside confirmed , and 4) Eni's total return made of dividend and buyback. ...

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