UniCredit Bank Reiterates BUY Rating on ENI

October 10 00:00 2011

LONDON, October 10 (RainbowNewsLine.com) – Analysts at UniCredit Equity Research have reiterated their BUY rating on the shares of ENI (ENI.MI). The target price is set to €18.00.

The company’s Congo Field Trip update suggests that its management is determined to address two major investors concern, one regarding the visibility of the production trajectory, and other one to rejuvenate ENI’s portfolio to support the growth beyond 2014, the analysts say in a research note published this morning. The analysts list following reasons for the reiteration of the BUY rating on ENI:

  • Exploration was successful in the Barent Sea, Mozambique, Ghana, Angola, Indonesia and Australia, but Asian markets drawn the attention where LNG prices are the highest.
  • The most profitable part of ENI’s gas supply portfolio is Green stream pipeline that should reach the plateau by the year-end.
  • ENI is expected to renegotiate contracts with Algeria & Russia by year-end, thus making its expected 2011E pro-forma EBITDA of EUR 3.5 billion.
  • ENI is considering the sale of Snam Rete Gas, if succeeded it will free up more resources to pursue more exploration and takeover of undeveloped assets.

The analyst believes that exploration and production is undervalued and still has potential for more investments. Successful renegotiations of gas take or pay contracts, strengthening of Oil prices and USD, and sale of Snam Rete Gas may trigger the prices of ENI shares.