Eni: RBC analysts upgrade to ‘Outperform,’ here’s why

Investing.com – After the second-quarter 2024 financial results exceeded expectations, analysts from RBC Capital upgraded their rating on Eni SpA (BIT:ENI) from ‘Sector Perform’ to "Outperform," setting a target price of €18.00.

Experts are convinced by the agility of the Six-Legged Dog in maneuvering on the divestment front.

"Eni," emphasized RBC, " is starting to demonstrate value creation in its ‘satellite’ strategy for the energy transition, through sell-downs in both Plenitude and Enilive at significantly higher multiples than its current valuation."

According to CEO Claudio Descalzi, the company could collect more than €8 billion in net proceeds from divestitures by 2027. "Despite the portfolio's relatively contained contribution in the second quarter, net debt has decreased, and with the divestments progressing, we anticipate leverage to be significantly below 0.2 by the end of the year, better than our initial expectations," the CEO specified during the conference call following the earnings report. "This," he added, "will allow us to accelerate the share buyback plan from €1.6 billion, confirming our ability to achieve both the business growth objectives and shareholder remuneration goals."

This perspective is also shared by RBC analysts, who believe that asset sales " asset sales should help drive de-leveraging which makes Eni’s distribution plans more defensive than peers, in our view."

In particular, the investment bank believes Eni can reach its disposal target of €8 billion "in half the time previously promised," that is, by the end of 2025, and that by that date, the group's debt could fall from about 20% to less than 10% thanks precisely to the divestitures.

For these reasons, explains RBC, "we upgrade to Outperform, with a €18 Price Target."

On the Milan Stock Exchange Monday, Eni's stock was up 0.39%.