Italgas shares fall following the announcement of its plan; confirmation of profit targets and dividends is not enough

(Il Sole 24 Ore Radiocor) - The market has given a lukewarm reception to the strategic plan of Italgas up to 2032. Shares in the company led by Paolo Gallo are trading on the Milan Stock Exchange (FTSE MIB ) is down by around two points. Going into more detail, the plan envisages total investments of 13 billion euros, up +14.6% compared with the previous 2025–2031 Plan; total efficiency gains of 280 million are expected, an increase of +12%, to which are added 120 million euros in revenue from incremental investments in digitalisation.

From a strictly financial perspective, EBITDA is expected to reach 3.3 billion, with total RAB of 21.7 billion euros, up on the targets set in the 2025–203 Plan; whilst adjusted EPS is forecast to grow at a CAGR of over 9% between 2025 and 2032, in line with the adjusted EPS CAGR for 2025–2031 set out in the previous Plan. The company has confirmed its 2026 guidance and dividend policy. Specifically, the Group confirms its expectation of exceeding €1 billion in adjusted net profit in 2029, after tax and minority interests. Adjusted net profit per share is expected to grow by over 9% CAGR between 2025 and 2032, in line with the weighted average growth in net profit per share for 2025–2031 set out in the previous Plan, calculated using the adjusted EPS for 2025 as the starting point for both plans.

According to analysts at Intermonte, which has a neutral rating with a target price of 10.4 euros, the plan sets out investment and EBITDA targets that exceed expectations, “although the improvement stems exclusively from the greater contribution of gas auctions and M&A (mergers and acquisitions) transactions”, the brokers explain. The plan allocates €8.3 billion for the development, digitalisation and repurposing of gas infrastructure in Italia (+4 per cent); €2.4 billion for future Atem gas distribution tenders (+59 per cent compared with the previous plan); €1 billion for the development and extension of the gas distribution network in Greece, in line with the previous Plan; €0.8 billion to strengthen the company’s position in the water and energy efficiency sectors (+5.6%) and €0.5 billion for M&A transactions in the gas distribution sector.

Despite the confirmation of the net profit and EPS targets – a development which, according to experts, “may be met with slight disappointment by the market” – we believe that, following the presentation of the plan, analysts’ consensus may move closer to the target of €1 billion in net profit by 2029, with a modest potential upward revision in the order of a few percentage points (low single digits)”.

Banca Akros points out that “the company has confirmed its targets for 2026. The targets in the new plan to 2029 are slightly better than those in the previous plan, whilst the new targets for 2032 are 10% higher (in terms of EBITDA) than the previous target for 2031. The company also plans to invest around 15% more than under the 2025–2031 plan (€13 billion compared with a total of €11.3 billion). The EPS CAGR and dividend policy remain unchanged”.