RBC Capital Downgrades Eni to Sector Perform

RBC Capital has downgraded Eni's stock rating from "Outperform" to "Sector Perform", reflecting a shift in their outlook on the company's performance. The rating change does not include an adjusted price target or percentage change in price target. Eni is an integrated oil and gas company that explores, produces, and refines oil worldwide. The Italian government owns a 30.5% stake in the company, which is placing its renewable and low-carbon business in a separate entity called Plenitude.

RBC Capital has downgraded Eni Spa's stock rating from "Outperform" to "Sector Perform," reflecting a shift in their outlook on the company's performance. The rating change does not include an adjusted price target or percentage change in price target. Eni is an integrated oil and gas company that explores, produces, and refines oil worldwide. The Italian government owns a 30.5% stake in the company, which is placing its renewable and low-carbon business in a separate entity called Plenitude.

The decision by RBC Capital follows a period of strong performance for Eni’s shares, which have benefited from several corporate transactions in recent months [1]. These transactions have helped maintain Eni’s balance sheet strength, but RBC Capital suggests the stock is "due a breather after a strong run" [1]. The investment firm continues to approve of Eni’s approach to the energy transition, noting that the strategy is now more appreciated by the market than when it was initially announced. However, RBC Capital sees "better risk-reward elsewhere in the sector," leading to the downgrade decision [1].

Eni shares declined 1.12% in premarket trading following the downgrade, with the company selling a 3% stake in Ithaca Energy [2]. Additionally, Eni and Delek Group plan to sell a 2% stake in Ithaca Energy, which may have contributed to the negative sentiment [2]. The Canadian bank RBC has also noted that Eni’s stock has been boosted by several transactions, but the stock is now considered ripe for a breather [3]. The price target remains unchanged at EUR17, but the recommendation has been downgraded to "Sector Perform" [3].

The downgrade comes as Eni and Delek Group offloaded a combined 3% stake in Ithaca Energy, valued at GBP106 million. The sale was conducted at a price of 213.75 pence per share [4]. Following the transaction, shares in Ithaca Energy fell 10% to 213.09 pence each in London on Tuesday morning [4].

References:
[1] https://www.investing.com/news/analyst-ratings/rbc-capital-downgrades-eni-stock-rating-to-sector-perform-after-strong-run-93CH-4218565
[2] https://www.ainvest.com/news/eni-spa-shares-fall-1-12-premarket-rbc-downgrades-rating-neutral-2509/
[3] https://www.finanzen.at/analyse/eni-sector-perform-1026548
[4] https://www.marketscreener.com/news/delek-and-eni-offload-gbp106-million-worth-shares-in-ithaca-energy-ce7c50d3da81f423