Eni’s Share Buyback Strategy: A Strategic Move to Enhance Shareholder Value

Eni’s recent EUR40 million share buyback program, executed in August 2025, is more than a routine financial maneuver—it’s a calculated step in a broader strategy to reward shareholders while positioning the company for long-term resilience. With a total budget of EUR1.5 billion announced in May 2025, Eni has already repurchased over 51 million shares, representing 1.54% of its share capital, at an average cost of EUR14.90 per share [1]. This aggressive buyback activity, coupled with a 5% dividend increase to EUR1.05 per share, underscores Eni’s commitment to returning capital to shareholders while maintaining a disciplined approach to debt management [2].

Financial Health and Strategic Rationale

Eni’s ability to fund such a program is rooted in its robust cash flow generation. For the first half of 2025, the company reported EUR6.2 billion in cash flow from operations (CFFO), with a net debt of EUR10.2 billion and a leverage ratio of 19% [5]. These metrics suggest a company with sufficient liquidity to pursue both capital expenditures and shareholder returns. The buyback aligns with Eni’s updated distribution policy, which targets a payout range of 35-40% of annual CFFO through dividends and share repurchases [2]. By prioritizing buybacks, Eni is effectively leveraging its strong cash flow to reduce the share count, thereby boosting earnings per share (EPS) and enhancing shareholder value.

The strategic rationale extends beyond immediate financial metrics. Eni’s 2025-2028 Strategic Plan emphasizes “strong and competitive financial returns” alongside its net-zero-by-2030 goals [1]. The buyback program is part of a broader effort to optimize capital structure while funding high-impact projects in renewable energy and carbon capture. For instance, Eni’s satellites—Plenitude and Enilive—are already generating significant cash flow, which the company plans to reinvest in its energy transition initiatives [2]. This dual focus on shareholder returns and sustainability positions Eni as a leader in the evolving energy landscape.

Impact on Shareholder Returns

The immediate impact of Eni’s buybacks is evident in its stock performance. Between May and August 2025, the company’s share price rose from EUR14.50 to EUR15.21, outperforming the broader European energy sector [3]. By reducing the number of outstanding shares, Eni is effectively increasing the ownership stake of existing shareholders. For example, the EUR40 million buyback of 2.6 million shares at EUR15.21 per share in late August reduced the share count by 0.08%, potentially amplifying future EPS growth [1]. Over the next 12 months, if Eni maintains its current pace, the program could reduce the share count by up to 3%, translating to a meaningful EPS boost.

Moreover, the buyback program signals confidence in Eni’s intrinsic value. By repurchasing shares at prices below its internal valuation, Eni is acting as a “smart buyer,” a strategy that rewards long-term investors. According to a report by Bloomberg, Eni’s management has indicated that the program could expand to EUR3.5 billion if cash flow exceeds expectations, further underscoring its commitment to shareholder value [3].

Long-Term Strategic Alignment

Eni’s buyback strategy is not isolated but deeply integrated with its long-term vision. The company’s leverage ratio is projected to fall below 20% by year-end, providing flexibility to fund both buybacks and capital expenditures [2]. Additionally, Eni’s net-zero-by-2030 target—achieved through a 55% reduction in Scope 1 and 2 emissions since 2018—reinforces its appeal to ESG-focused investors [4]. By aligning financial returns with sustainability goals, Eni is addressing both shareholder and societal expectations, a critical factor in today’s capital markets.

Conclusion

Eni’s EUR40 million share buyback is a multifaceted strategy that balances immediate shareholder rewards with long-term resilience. By leveraging strong cash flow, optimizing capital structure, and aligning with sustainability goals, Eni is positioning itself as a model for energy companies navigating the transition to a low-carbon economy. For investors, the program offers a clear signal: Eni is not only confident in its financial strength but also committed to delivering value in a rapidly evolving market.

Source:
[1] Eni: report on the purchase of treasury shares during ... [https://www.eni.com/en-IT/media/press-release/2025/09/pr-eni-report-purchase-treasury-shares-25-29-august-2025.html]
[2] Strategic Plan 2025-2028 [https://www.eni.com/en-IT/investors/strategy/strategic-plan.html]
[3] Eni launches the new share buyback program [https://www.eni.com/en-IT/media/press-release/2025/05/eni-launches-the-new-share-buyback-program.html]
[4] Eni S.p.A. [https://www.climateaction100.org/company/eni-spa/]
[5] Eni S.P.A. Q2 Earnings Call Highlights Strategic Growth ... [https://www.ainvest.com/news/eni-q2-earnings-call-highlights-strategic-growth-exploration-success-renewable-energy-expansion-2507]