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Eni Outperforms the Industry YTD: Should Investors Bet on the Stock?
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Key Takeaways
Eni shares have gained 47.3% YTD, outperforming the industry's 35.6% rise, supported by strong fundamentals.
Eni's production rose 4% year over year, while higher oil prices and refining margins boosted profitability.
E raised its 2026 cash flow guidance to 16.5B euros & buybacks to 3.8B euros, reflecting improved performance.
Eni S.p.A. (E - Free Report) is an integrated energy company based in Italy, which operates across various segments spanning exploration, renewables, liquefied natural gas (LNG) and refining. Its Exploration & Production segment is primarily involved in the exploration and development and production of oil and natural gas across several countries in Africa, the Americas, Europe, the Middle East and Asia.
The Global Gas & LNG Portfolio is engaged in selling natural gas through pipelines and LNG, while the Power business sells electricity on the Italian market. The Refining and Chemicals business underscores E’s presence in downstream activities. Meanwhile, Enilive and Plenitude focus on the company’s biofuels operations and renewables & retail energy business, respectively.
Year-to-date, the E stock has gained 47.3%, surpassing the industry’s 35.6% growth. This compares with its peers, ExxonMobil Holdings (XOM - Free Report) and BP plc (BP - Free Report) , which have grown 38.6% and 30.4%, respectively. While the price performance makes Eni an attractive choice, it would be wise to evaluate the fundamentals and overall business environment for the stock before coming to an investment decision.
Image Source: Zacks Investment Research
Eni’s Diversified Upstream Operations Support Growth
Eni has a diversified portfolio of upstream assets across several countries, including Egypt, Cote d’Ivoire, Mozambique, Italy, the UK, Norway, Angola, Congo, Indonesia and many more. In the recently reported quarter, hydrocarbon production averaged 1,829 thousand barrels of oil equivalent per day (MBoe/d), up 4% year over year. In the first nine months of 2026, Eni’s exploration successes added 1.23 million barrels of oil equivalent to its resource base.
The project pipeline includes final investment decisions (FIDs) on the Baleine Phase 3 in Cote d’Ivoire, the Cronos offshore Cyprus, the Greater PAJ offshore project in Angola and other gas projects in Indonesia. The company also intends to begin exploration activities in Venezuela and has signed agreements for the Junin-5 and Perla projects. These exploration successes provide Eni with strong future production potential, enhance its long-term resource base and improve its reserve replacement ratio (RRR).
Image Source: Eni S.p.A.
High Oil Prices and Refining Strength Support Eni’s Gains
Per the U.S. Energy Information Administration, the Brent crude spot price is expected to average around $96 per barrel in 2026, significantly higher than the $69 average in 2025. Earlier this year, oil prices were expected to average between $50 per barrel and $60 per barrel for 2026. This significant increase was mainly driven by the conflict in the Middle East, which led to supply disruptions through the Strait of Hormuz and damage to production facilities in the region. The significant rise in benchmark oil prices is expected to be extremely favorable for its exploration and production activities.
The conflict in the Middle East has also tightened refined product markets, particularly as reduced refining capacity and disruptions in refinery operations have constrained global supplies. Supply disruptions and low global product inventories have significantly boosted refining margins, benefiting Eni’s refining operations as well. The Standard Eni Refining Margin climbed to $28.10 per barrel in the third quarter compared with $8.90 a year earlier. Its Refining business also reported €727 million in adjusted EBIT, a significant improvement from the third quarter of 2025.
Improved Financials Back Eni’s Investment Case
Following a strong third-quarter performance, Eni's financial outlook has improved. Management raised E’s adjusted cash flow from operations (CFFO) guidance to €16.5 billion, reflecting a €1.2 billion underlying improvement over its previous guidance. This increase highlights strong operational performance and improved cash generation. Eni noted that 2026 had been a strong year for the company so far, supported by a favorable commodity pricing environment. The company is using the incremental cash flow from its operations to reward its shareholders.
Management also increased its 2026 share repurchase program to €3.8 billion and announced an extraordinary dividend of €1.3 billion. The company maintained its gross capital expenditure guidance at €7 billion, while net capex is expected to remain below €4.5 billion, reflecting its disciplined capital spending approach. At the end of the third quarter, its pro forma gearing declined to a record low of 9%. The combination of stronger cash flows, disciplined capital spending and a stronger balance sheet is expected to provide greater financial flexibility to pursue growth opportunities and maintain shareholder distributions.
Valuation Snapshot
The valuation snapshot indicates that Eni is currently trading at a premium compared to the industry, reflecting its strong operational performance and favorable outlook. This is reflected in its trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 6.79X compared with the broader industry average of 5.92X. Its peers, XOM and BP, are trading at 7.87X and 2.3X trailing 12-month EV/EBITDA, respectively.
Image Source: Zacks Investment Research
Time to Bet on the Stock or Wait?
The current oil price environment is extremely favorable for Eni’s upstream activities. The current oil price environment is anticipated to boost its upstream revenues and cash flows and support higher shareholder returns. In addition, the expanding project pipeline supports its long-term production growth prospects. The company’s downstream operations are also expected to benefit from the tightness in refined product markets. However, its exposure to commodity price volatility, continued weakness in the Chemicals segment and the premium valuation raise concerns.
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Eni Outperforms the Industry YTD: Should Investors Bet on the Stock?
Key Takeaways
Eni S.p.A. (E - Free Report) is an integrated energy company based in Italy, which operates across various segments spanning exploration, renewables, liquefied natural gas (LNG) and refining. Its Exploration & Production segment is primarily involved in the exploration and development and production of oil and natural gas across several countries in Africa, the Americas, Europe, the Middle East and Asia.
The Global Gas & LNG Portfolio is engaged in selling natural gas through pipelines and LNG, while the Power business sells electricity on the Italian market. The Refining and Chemicals business underscores E’s presence in downstream activities. Meanwhile, Enilive and Plenitude focus on the company’s biofuels operations and renewables & retail energy business, respectively.
Year-to-date, the E stock has gained 47.3%, surpassing the industry’s 35.6% growth. This compares with its peers, ExxonMobil Holdings (XOM - Free Report) and BP plc (BP - Free Report) , which have grown 38.6% and 30.4%, respectively. While the price performance makes Eni an attractive choice, it would be wise to evaluate the fundamentals and overall business environment for the stock before coming to an investment decision.
Image Source: Zacks Investment Research
Eni’s Diversified Upstream Operations Support Growth
Eni has a diversified portfolio of upstream assets across several countries, including Egypt, Cote d’Ivoire, Mozambique, Italy, the UK, Norway, Angola, Congo, Indonesia and many more. In the recently reported quarter, hydrocarbon production averaged 1,829 thousand barrels of oil equivalent per day (MBoe/d), up 4% year over year. In the first nine months of 2026, Eni’s exploration successes added 1.23 million barrels of oil equivalent to its resource base.
The project pipeline includes final investment decisions (FIDs) on the Baleine Phase 3 in Cote d’Ivoire, the Cronos offshore Cyprus, the Greater PAJ offshore project in Angola and other gas projects in Indonesia. The company also intends to begin exploration activities in Venezuela and has signed agreements for the Junin-5 and Perla projects. These exploration successes provide Eni with strong future production potential, enhance its long-term resource base and improve its reserve replacement ratio (RRR).
Image Source: Eni S.p.A.
High Oil Prices and Refining Strength Support Eni’s Gains
Per the U.S. Energy Information Administration, the Brent crude spot price is expected to average around $96 per barrel in 2026, significantly higher than the $69 average in 2025. Earlier this year, oil prices were expected to average between $50 per barrel and $60 per barrel for 2026. This significant increase was mainly driven by the conflict in the Middle East, which led to supply disruptions through the Strait of Hormuz and damage to production facilities in the region. The significant rise in benchmark oil prices is expected to be extremely favorable for its exploration and production activities.
The conflict in the Middle East has also tightened refined product markets, particularly as reduced refining capacity and disruptions in refinery operations have constrained global supplies. Supply disruptions and low global product inventories have significantly boosted refining margins, benefiting Eni’s refining operations as well. The Standard Eni Refining Margin climbed to $28.10 per barrel in the third quarter compared with $8.90 a year earlier. Its Refining business also reported €727 million in adjusted EBIT, a significant improvement from the third quarter of 2025.
Improved Financials Back Eni’s Investment Case
Following a strong third-quarter performance, Eni's financial outlook has improved. Management raised E’s adjusted cash flow from operations (CFFO) guidance to €16.5 billion, reflecting a €1.2 billion underlying improvement over its previous guidance. This increase highlights strong operational performance and improved cash generation. Eni noted that 2026 had been a strong year for the company so far, supported by a favorable commodity pricing environment. The company is using the incremental cash flow from its operations to reward its shareholders.
Management also increased its 2026 share repurchase program to €3.8 billion and announced an extraordinary dividend of €1.3 billion. The company maintained its gross capital expenditure guidance at €7 billion, while net capex is expected to remain below €4.5 billion, reflecting its disciplined capital spending approach. At the end of the third quarter, its pro forma gearing declined to a record low of 9%. The combination of stronger cash flows, disciplined capital spending and a stronger balance sheet is expected to provide greater financial flexibility to pursue growth opportunities and maintain shareholder distributions.
Valuation Snapshot
The valuation snapshot indicates that Eni is currently trading at a premium compared to the industry, reflecting its strong operational performance and favorable outlook. This is reflected in its trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 6.79X compared with the broader industry average of 5.92X. Its peers, XOM and BP, are trading at 7.87X and 2.3X trailing 12-month EV/EBITDA, respectively.
Image Source: Zacks Investment Research
Time to Bet on the Stock or Wait?
The current oil price environment is extremely favorable for Eni’s upstream activities. The current oil price environment is anticipated to boost its upstream revenues and cash flows and support higher shareholder returns. In addition, the expanding project pipeline supports its long-term production growth prospects. The company’s downstream operations are also expected to benefit from the tightness in refined product markets. However, its exposure to commodity price volatility, continued weakness in the Chemicals segment and the premium valuation raise concerns.
But, given the current business environment and its focus on balance sheet improvement, investors should consider owning the E stock. E currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.