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Here's Why Hold Strategy is Apt for Eni (E) Stock Right Now
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Eni SpA (E - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days.
The company, with a Zacks Rank #3 (Hold), has gained 22.6% over the past year compared with 5.3% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
The West Texas Intermediate crude price is trading around the $78-per-barrel mark, highlighting a handsome commodity pricing environment. Despite uncertainties prevailing in the energy market over fears of recession, oil prices are highly favorable for exploration and production activities.
Eni is acquiring upstream company Neptune Energy, which will help expand its natural gas business and is crucial to its growth strategy. The acquisition will increase its production plateau by more than 130,000 barrels of oil equivalent per day.
For 2023, Eni expects a total hydrocarbon production of 1.63-1.67 million barrels of oil equivalent per day (MMBoe/d), indicating an increase from the 1.61 MMBoe/d reported last year. Coupled with higher oil prices, increased production will boost the company’s bottom line.
In 2022, Eni added about 750 million barrels of oil equivalent (MMBoe) of discovered resources to its reserve base. The significant discoveries amid favorable oil prices are pretty compelling. The Italian oil giant expects to discover exploration resources of 700 MMBoe this year. The developments will enhance Eni’s organic growth and cash flow generation.
Eni’s commitment to the energy transition is commendable. It has an ambitious plan to reach 60 gigawatts of installed renewable energy capacity by 2050. Eni’s integration of its retail and renewable power business, Plenitude, reflects its strong focus on capitalizing on the mounting demand for renewables and green energy products.
For 2023, the integrated energy major expects its capital expenditure budget to remain below €9 billion, lower than the original guidance of €9.2 billion. Cutting the capital budget will increase Eni’s cash flow significantly, which can have a powerful impact on its value in the marketplace.
Thus, Eni is poised for an upside in the coming days.
Risks to Combat
Compared with the composite stocks belonging to the industry, Eni’s balance sheet has more debt exposure. For the past five years, its long-term debt-to-capital ratio remained well above the industry average.
USA Compression Partners is one of the largest independent natural gas compression services providers across the United States in terms of fleet horsepower.
USA Compression Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for USAC’s 2023 and 2024 earnings per share is pegged at 30 cents and 55 cents, respectively.
Global Partners is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.46 and $3.69, respectively. GLP currently has a Zacks Style Score of A for Value and Growth.
Evolution Petroleum is an independent energy company. EPM has a Zacks Style Score of A for Growth and B for Value.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings per share is pegged at $1.11 and $1.08, respectively.
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Here's Why Hold Strategy is Apt for Eni (E) Stock Right Now
Eni SpA (E - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days.
The company, with a Zacks Rank #3 (Hold), has gained 22.6% over the past year compared with 5.3% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
The West Texas Intermediate crude price is trading around the $78-per-barrel mark, highlighting a handsome commodity pricing environment. Despite uncertainties prevailing in the energy market over fears of recession, oil prices are highly favorable for exploration and production activities.
Eni is acquiring upstream company Neptune Energy, which will help expand its natural gas business and is crucial to its growth strategy. The acquisition will increase its production plateau by more than 130,000 barrels of oil equivalent per day.
For 2023, Eni expects a total hydrocarbon production of 1.63-1.67 million barrels of oil equivalent per day (MMBoe/d), indicating an increase from the 1.61 MMBoe/d reported last year. Coupled with higher oil prices, increased production will boost the company’s bottom line.
In 2022, Eni added about 750 million barrels of oil equivalent (MMBoe) of discovered resources to its reserve base. The significant discoveries amid favorable oil prices are pretty compelling. The Italian oil giant expects to discover exploration resources of 700 MMBoe this year. The developments will enhance Eni’s organic growth and cash flow generation.
Eni’s commitment to the energy transition is commendable. It has an ambitious plan to reach 60 gigawatts of installed renewable energy capacity by 2050. Eni’s integration of its retail and renewable power business, Plenitude, reflects its strong focus on capitalizing on the mounting demand for renewables and green energy products.
For 2023, the integrated energy major expects its capital expenditure budget to remain below €9 billion, lower than the original guidance of €9.2 billion. Cutting the capital budget will increase Eni’s cash flow significantly, which can have a powerful impact on its value in the marketplace.
Thus, Eni is poised for an upside in the coming days.
Risks to Combat
Compared with the composite stocks belonging to the industry, Eni’s balance sheet has more debt exposure. For the past five years, its long-term debt-to-capital ratio remained well above the industry average.
Stocks to Consider
Some better-ranked players in the energy sector are USA Compression Partners, LP (USAC - Free Report) , currently sporting a Zacks Rank of 1 (Strong Buy), and Global Partners (GLP - Free Report) and Evolution Petroleum Corporation (EPM - Free Report) , carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
USA Compression Partners is one of the largest independent natural gas compression services providers across the United States in terms of fleet horsepower.
USA Compression Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for USAC’s 2023 and 2024 earnings per share is pegged at 30 cents and 55 cents, respectively.
Global Partners is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.46 and $3.69, respectively. GLP currently has a Zacks Style Score of A for Value and Growth.
Evolution Petroleum is an independent energy company. EPM has a Zacks Style Score of A for Growth and B for Value.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings per share is pegged at $1.11 and $1.08, respectively.