Italgas: Société Générale upgrades to buy.
(CercleFinance.com) - Société Générale (SG) has upgraded its rating on the Italgas share to buy, from its previous hold rating.
According to a research report, the group's earnings profile is underestimated by the market, especially since the Italian state is pushing for concentration amongst gas distributors. SG has therefore increased its 12-month target price for the share from 4.80 euros to 5.12 euros.
Published on 28 July, Italgas' interim results included a robust increase in revenues (+9.5% to 565 million euros), “driven by higher regulated revenues from the gas distribution business”. Growth in EBITDA was even higher (+22% to 390 million euros), as was the bottom line (+23% to 140 million euros). This is all good news which has led SG to raise its earnings estimates for the group.
According to its research report, "Italgas still has the most attractive story among the regulated utilities we cover from Italy," because of its growth, and a lower valuation than Snam and Terna.
"We think the latter (dividend payout ratio) could be improved and visibility on market consolidation should rise," SG concludes.
Copyright (c) 2017 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.
According to a research report, the group's earnings profile is underestimated by the market, especially since the Italian state is pushing for concentration amongst gas distributors. SG has therefore increased its 12-month target price for the share from 4.80 euros to 5.12 euros.
Published on 28 July, Italgas' interim results included a robust increase in revenues (+9.5% to 565 million euros), “driven by higher regulated revenues from the gas distribution business”. Growth in EBITDA was even higher (+22% to 390 million euros), as was the bottom line (+23% to 140 million euros). This is all good news which has led SG to raise its earnings estimates for the group.
According to its research report, "Italgas still has the most attractive story among the regulated utilities we cover from Italy," because of its growth, and a lower valuation than Snam and Terna.
"We think the latter (dividend payout ratio) could be improved and visibility on market consolidation should rise," SG concludes.
Copyright (c) 2017 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.