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Analysts’ Favorite Integrated Energy Stocks: Here Are the Top 10

PART:
1 2 3 4 5 6 7 8 9 10 11
Part 8
Analysts’ Favorite Integrated Energy Stocks: Here Are the Top 10 PART 8 OF 11

Analyst Ratings for Eni SpA: Not Much Coverage, Turning Negative

Eni SpA, last stock in the middle

In this part of the series, we’ll look at analyst ratings for Eni SpA (E), which occupies the seventh slot in our list of the top ten integrated energy companies with the most “buy” ratings. Eni SpA is the last stock in the middle of our companies that have “buy” ratings between 50.0% and 75.0%. The other stocks in the middle include Cenovus Energy (CVE), Chevron (CVX), and BP (BP), with “buy” ratings of 65.0%, 54.0%, and 50.0%, respectively. We looked at these stocks in the previous parts of this series. Now let’s delve into analyst ratings for Eni SpA.

Eni SpA (E) is an Italian integrated energy company with exploration and production, gas and power, and refining and marketing (including chemicals) business segments. The company’s market cap (capitalization) of $59.0 billion ranks it seventh among the ten companies in this series.

Analyst Ratings for Eni SpA: Not Much Coverage, Turning Negative

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Analyst ratings for Eni SpA

As the above analyst rating graph shows, only two analysts cover Eni SpA in the United States. Of those, one has a “strong buy” rating, and the other one has a “sell” rating. However, both analysts had “strong buy” ratings on the stock in June 2017.

Since then, even the mean target price for Eni SpA (E) has fallen 24.0% to $31 per share. The target price implies a 5.0% fall from the current level. However, the company pays dividends to shareholders and has a current dividend yield of 6.1%.

Valuations

Eni SpA trades at a forward PE (price-to-earnings) multiple of 15.8x, which is below the average for our group of ten companies. Eni SpA also trades below the forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) of the peer average. The stock trades below the peer average on both valuation ratios, probably due to the company’s high leverage compared to its peers.

In terms of cash flow, its cash flow from operations in the first half of 2017 couldn’t cover its capex (capital expenditure) and dividend outflows. This shortfall was met by divestment proceeds and the utilization of cash reserves.

Royal Dutch Shell (RDS.A) and ExxonMobil (XOM) had surplus cash flows from operations, which covered their capex and dividend payments in the first half of 2017. For more on this, you can refer to XOM, CVX, RDS.A, BP: Who Had Better Cash Flows in 1H17?

In the next part of this series, we’ll look at analyst ratings for Petrobras (PBR).

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