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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 2024 and 2025 in the past 30 days.
The company, with a Zacks Rank #3 (Hold) at present, has gained 10.7% over the past year compared with 5.6% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
Strategic Asset Optimization
Eni has demonstrated a commitment to optimizing its asset portfolio through strategic acquisitions and divestitures, significantly enhancing its business model efficiency and focus. In 2023, Eni streamlined its operations by divesting non-core assets in Congo and Nigeria, and acquiring Neptune to strengthen its core business areas. This approach not only simplifies the operational focus but also reallocates resources to high-potential areas, offering a more robust investment case for sustained growth and profitability.
Robust Exploration & Production Strategy
Eni has maintained a consistent focus on high-impact exploration activities for 15 consecutive years, leading to significant discoveries in diverse geographic locations. The company’s approach, which emphasizes high equity shares and operatorship, has facilitated rapid development from discovery to production. Eni's exploration model, backed by advanced computational capabilities and a centralized process for basin knowledge, ensures efficient resource management and a reduced time to market, thereby sustaining growth and enhancing investor confidence in its operational capabilities.
Leadership in Low-Carbon Initiatives
Eni's leadership in adopting low-carbon technologies and processes underscores its competitive advantage in transitioning toward sustainable energy solutions. The company’s phased development approach, particularly noted in projects like Baleine, has significantly reduced time to market and minimized environmental impact. This strategy aligns with the global shift toward environmental sustainability and positions Eni as a frontrunner in the industry, potentially leading to increased investor confidence and market valuation.
Exploitation of Technological Advancements
The utilization of high-performance computing for exploration activities has placed Eni at the forefront of technological innovation within the industry. Its ability to conduct 70 million billion math operations per second, upgrading to 600 million billion, has led to unprecedented efficiency in seismic imaging and exploration. This technological edge facilitates faster and more accurate discovery rates, thereby reducing costs and enhancing profitability.
Expansion in Renewable Energy
Plenitude, an Eni subsidiary, is set to expand its renewable energy capacity significantly, targeting more than 8 GW by 2027 — a substantial increase from the current levels. This expansion is supported by a solid investment strategy aimed at boosting organic growth and selective market operations, which is likely to appeal to investors focused on long-term sustainability and growth in the green energy sector.
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 was well above the industry average.
SM Energy Company (SM - Free Report) is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.15 and $6.73, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
MPLX LP (MPLX - Free Report) is a master limited partnership engaged in providing a wide range of midstream energy services, including fuel distribution solutions. MPLX currently has a Momentum Score of A.
The Zacks Consensus Estimate for MPLX’s 2024 and 2025 EPS is pegged at $4.11 and $4.36, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
Global Partners (GLP - Free Report) is a leading operator of gasoline stations and convenience stores. Over the past 60 days, GLP has witnessed upward earnings estimate revisions for 2024 and 2025, respectively.
The Zacks Consensus Estimate for Global Partners’ 2024 and 2025 EPS is pegged at $3.90 and $4.47, respectively. GLP currently has a Value Score of A.
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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 2024 and 2025 in the past 30 days.
The company, with a Zacks Rank #3 (Hold) at present, has gained 10.7% over the past year compared with 5.6% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
Strategic Asset Optimization
Eni has demonstrated a commitment to optimizing its asset portfolio through strategic acquisitions and divestitures, significantly enhancing its business model efficiency and focus. In 2023, Eni streamlined its operations by divesting non-core assets in Congo and Nigeria, and acquiring Neptune to strengthen its core business areas. This approach not only simplifies the operational focus but also reallocates resources to high-potential areas, offering a more robust investment case for sustained growth and profitability.
Robust Exploration & Production Strategy
Eni has maintained a consistent focus on high-impact exploration activities for 15 consecutive years, leading to significant discoveries in diverse geographic locations. The company’s approach, which emphasizes high equity shares and operatorship, has facilitated rapid development from discovery to production. Eni's exploration model, backed by advanced computational capabilities and a centralized process for basin knowledge, ensures efficient resource management and a reduced time to market, thereby sustaining growth and enhancing investor confidence in its operational capabilities.
Leadership in Low-Carbon Initiatives
Eni's leadership in adopting low-carbon technologies and processes underscores its competitive advantage in transitioning toward sustainable energy solutions. The company’s phased development approach, particularly noted in projects like Baleine, has significantly reduced time to market and minimized environmental impact. This strategy aligns with the global shift toward environmental sustainability and positions Eni as a frontrunner in the industry, potentially leading to increased investor confidence and market valuation.
Exploitation of Technological Advancements
The utilization of high-performance computing for exploration activities has placed Eni at the forefront of technological innovation within the industry. Its ability to conduct 70 million billion math operations per second, upgrading to 600 million billion, has led to unprecedented efficiency in seismic imaging and exploration. This technological edge facilitates faster and more accurate discovery rates, thereby reducing costs and enhancing profitability.
Expansion in Renewable Energy
Plenitude, an Eni subsidiary, is set to expand its renewable energy capacity significantly, targeting more than 8 GW by 2027 — a substantial increase from the current levels. This expansion is supported by a solid investment strategy aimed at boosting organic growth and selective market operations, which is likely to appeal to investors focused on long-term sustainability and growth in the green energy sector.
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 was well above the industry average.
Stocks to Consider
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company (SM - Free Report) is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.15 and $6.73, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
MPLX LP (MPLX - Free Report) is a master limited partnership engaged in providing a wide range of midstream energy services, including fuel distribution solutions. MPLX currently has a Momentum Score of A.
The Zacks Consensus Estimate for MPLX’s 2024 and 2025 EPS is pegged at $4.11 and $4.36, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
Global Partners (GLP - Free Report) is a leading operator of gasoline stations and convenience stores. Over the past 60 days, GLP has witnessed upward earnings estimate revisions for 2024 and 2025, respectively.
The Zacks Consensus Estimate for Global Partners’ 2024 and 2025 EPS is pegged at $3.90 and $4.47, respectively. GLP currently has a Value Score of A.