Eni: Berenberg downgrades shares in sector note
(CercleFinance.com) - Berenberg has downgraded its rating on Italy's biggest oil and gas group Eni from "buy" to "hold", citing broader pressure from the sector.
The German broker points out that the oil and gas sector has underperformed the European market over the past five years, with the dividend yield spread against the market expanding substantially.
"In our view, this higher cost of equity has been driven by high commodity price volatility, weaker oil prices and rising uncertainty about the future of oil demand as consumers increasingly focus on the energy transition and the growth in alternatives to fossil fuels," it says in a note.
Berenberg has alo cut its target price on Eni, from 18 euros to 15.5 euros.
The Eni share is currently up 2.2% at 14.3 euros in Milan, boosted by the sudden rise of oil prices following drone attacks on two Saudi plants.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The German broker points out that the oil and gas sector has underperformed the European market over the past five years, with the dividend yield spread against the market expanding substantially.
"In our view, this higher cost of equity has been driven by high commodity price volatility, weaker oil prices and rising uncertainty about the future of oil demand as consumers increasingly focus on the energy transition and the growth in alternatives to fossil fuels," it says in a note.
Berenberg has alo cut its target price on Eni, from 18 euros to 15.5 euros.
The Eni share is currently up 2.2% at 14.3 euros in Milan, boosted by the sudden rise of oil prices following drone attacks on two Saudi plants.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.