ENI and Saipem 2 must-sees among oil companies. Here are the others


Today’s session in Piazza Affari continues all uphill for oil sector stocks which are not affected by the weak and uncertain trend of oil.

Oil, but oil stocks rally in Piazza Affari. Saipem stands out, ENI out of tune

Black gold prices are clearly recovering from intraday lows, but are still traveling downward and stand at $ 32.65, down 0.45%.

This does not weigh today on the oil sector in which Saipem stands out, boasting a rally of over 4%, followed by Tenaris which appreciates by 1.54%, while ENI out of tune, which goes against the trend of 0.53%.

Smaller-cap stocks are flying, with Saras and Maire Tecnimont running by 5.98% and 3.05% respectively.

ENI is an excellent bet according to brokers

In the oil sector in Piazza Affari there are several interesting topics to focus on, starting from ENI, on which in recent days Kepler Cheuvreux who reiterated the “buy” recommendation on the title, with a target price of 10 euros, a value that offers a upside potential of more than 21% compared to current stock market prices.

The broker appreciates ENI’s balance sheet, which is one of the strongest in the reference sector, while signaling that the group remains fully committed to its bold decarbonisation and transformation plan.

Kepler Cheuvreux analysts are also convinced that ENI’s dividend is safe in a long-term Brent scenario at $ 50 a barrel.

To bet on the title are also the colleagues of Equita SIM who two days ago reiterated the “buy” rating, with a target price of 11 euros.

The focus of the Milanese SIM is on the disposal of assets in gas in Australia, an operation that for analysts would make strategic sense, given the concentration of efforts in E&P in key areas after the decision to cut the Capex above 25 % in 2020, against the collapse of hydrocarbon prices.

The reference value of the assets in question could be identified as 100-300 million euros.
According to the Milanese SIM, the sale, if carried out, would have marginally positive consequences for the title.

Saipem is to be put in the portfolio

On the other hand, Citigroup likes Saipem, which recently renewed the invitation to buy, with a fair value of 3.1 euros.
The title is the top pick of the US bank in the reference sector and analysts appreciate Saipem’s competitiveness in the award of new jobs in all business sectors, especially in the on-site E&C.

For Citigroup, the valuation of the security is also discounted and the idea is that Saipem will be able to navigate the global crisis triggered by the coronavirus, thanks to the good position of the order book and the robust balance sheet.

Good news for the title also comes from Banca Akros which has a “buy” recommendation, with a target price of 4.5 euros.

Analysts welcomed the news of the new contract that Saipem was awarded in the middle of the month in Nigeria, speaking of a large order.

Tenaris requires caution

There is less enthusiasm for Tenaris that two days ago ended up under the lens of UBS, whose analysts confirmed the “neutral” rating with a target price reduced from 22 to 13.5 dollars.

This move reflects a cut in estimates for the entire global oil service sector, with a reduction in EBITDA forecasts by an average of 46% for this year and 49% for the next.

Saras: for Equita SIM it is to buy

Among the smaller capitalization securities, a purchase opportunity is offered by Saras on which Equita SIM three days reiterated the “buy” recommendation, with a fair value of 1.1 euros.

Experts reiterate their preference for Saras within the mid-downstream oil segment, explaining that their positive opinion is based on the fact that analysts predict a significant recovery of margins from June / July for the recovery of traffic and demand for fuels, as has already happened for China and South Korea.

To focus on Maire Tecnimont is Kepler Cheuvreux

Good news for Maire Tecnimont instead comes from Kepler Cheuvreux who, despite having recently reduced the target price from 3.5 to 3 euros, keeps the “buy” rating unchanged.

The broker appreciates the group’s solid order intake, profitability and execution, despite the demon of working capital returning in the first quarter, with a significant deterioration.

This is due to coronavirus a lot and according to Keper Cheuvreux it will weigh on the equity story up to normalization.

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