Italgas S.p.A. (IG) AI Stock Analysis

• Market Cap: €7.06B
• Dividend Yield: 5.48%
• Average Volume (3M): 4.28M
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.48
• Revenue Growth: -3.34%
• EPS Growth: 8.88%
• Country: IT
• Employees: 6,500
• Sector: Utilities
• Sector Strength: 69
• Industry: Regulated Gas
• EPS (TTM): 0.20
• Shares Outstanding: 1,014,692,400
• 10 Day Avg. Volume: 2,925,040
• 30 Day Avg. Volume: 4,281,330
• PEG Ratio: 3.34
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 34.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €7.26
• Price Target Upside: 5.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 79 Outperform
• Price Target: €8.00 ▲(16.45%Upside)

Italgas S.p.A.'s strong financial performance, particularly in profitability and cash flow, combined with attractive valuation metrics, drive a favorable stock score. While the technical indicators suggest positive momentum, caution is advised due to potential overbought conditions and high leverage.

Positive Factors

Acquisition

Italgas' acquisition of 2i Rete Gas represents an equity story transformation, driving top line growth and presenting a compelling cost synergy opportunity.

Dividend and EPS Growth

Italgas presents an attractive combination of both dividend yield and EPS growth.

Market Position

The combination of Italgas and 2i Rete results in a national champion gas distributor with ~50% market share.

Negative Factors

Integration Challenges

The company's CMD is seen as a key catalyst, with expectations for an integration update and indication of initial synergies.

Italgas S.p.A. Business Overview & Revenue Model

Company Description

Italgas S.p.A. (IG) is a leading gas distribution company in Italy, with a rich history dating back to 1837. It operates primarily in the energy sector, focusing on the distribution and measurement of natural gas. The company serves a vast network of residential, commercial, and industrial customers, ensuring the safe and efficient delivery of natural gas across the country. Italgas is committed to innovation and sustainability, integrating advanced technologies to modernize its infrastructure and improve service quality.

How the Company Makes Money

Italgas S.p.A. makes money primarily through the distribution of natural gas. The company generates revenue by charging fees for the transportation and distribution of gas to various customers, including residential households, businesses, and industrial clients. These fees are regulated and form the bulk of the company's income. Additionally, Italgas invests in infrastructure upgrades and network expansions, which can lead to increased capacity and customer base, further boosting revenue. The company may also engage in strategic partnerships and collaborations to enhance its service offerings and operational efficiency. Regulatory frameworks and tariffs set by the Italian energy authority significantly influence the company's earnings, as they dictate the allowable charges for gas distribution services.

Italgas S.p.A. Financial Statement Overview

Summary

Italgas S.p.A. demonstrates strong profitability and cash flow generation with a high gross profit margin and positive free cash flow growth. However, inconsistent revenue growth and high leverage pose risks to financial stability.

Income Statement

Italgas S.p.A. has demonstrated solid profitability with a strong gross profit margin of 88.83% and a net profit margin of 18.90% for 2024. However, the revenue growth has been inconsistent, showing a decline in 2024 compared to previous years. The EBIT and EBITDA margins remain robust at 30.87% and 53.51%, respectively, indicating efficient operational management despite the revenue dip.

Balance Sheet

The company's balance sheet presents a mixed picture. The debt-to-equity ratio is high at 2.92, reflecting significant leverage. However, the return on equity stands at 19.48%, indicating good profitability for equity holders. The equity ratio is relatively low at 20.53%, suggesting a heavy reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

Italgas S.p.A. shows a strong improvement in cash flows, with a positive free cash flow growth rate of 171.28% from 2023 to 2024. The operating cash flow to net income ratio is 2.29, highlighting efficient cash generation from operations relative to net income. The free cash flow to net income ratio is 0.43, indicating a healthy conversion of net income into free cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.53B	2.61B	2.18B	2.10B	2.06B
Gross Profit	2.25B	1.62B	745.46M	721.78M	781.68M
EBITDA	1.36B	1.20B	1.12B	1.03B	1.05B
Net Income	478.85M	439.57M	407.29M	362.81M	384.63M
Balance Sheet
Total Assets	11.97B	11.14B	11.03B	10.15B	9.12B
Cash, Cash Equivalents and Short-Term Investments	362.85M	267.19M	451.95M	1.39B	664.14M
Total Debt	7.19B	6.92B	6.55B	6.38B	5.41B
Total Liabilities	9.18B	8.54B	8.64B	8.01B	7.15B
Stockholders Equity	2.46B	2.28B	2.11B	1.89B	1.74B
Cash Flow
Free Cash Flow	206.05M	-289.23M	-229.06M	20.05M	14.61M
Operating Cash Flow	1.10B	572.67M	548.17M	839.63M	761.66M
Investing Cash Flow	-809.13M	-857.60M	-1.28B	-813.74M	-771.63M
Financing Cash Flow	-136.88M	82.95M	-209.17M	701.84M	411.75M

Italgas S.p.A. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:IG, the sentiment is Neutral. The current price of 6.87 is below the 20-day moving average (MA) of 7.04, above the 50-day MA of 6.78, and above the 200-day MA of 5.60, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 50.68 is Neutral, neither overbought nor oversold. The STOCH value of 12.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IT:IG.

Italgas S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IG	79 Outperform	€7.06B	12.39	20.21%	5.48%	-3.34%	8.88%
ASC	77 Outperform	€644.71M	16.70	4.51%	5.04%	13.22%	4.89%
SRG	75 Outperform	€16.80B	13.26	16.18%	6.96%	-16.40%	10.90%
Sector *	70 Outperform	€13.16B	44.45	11.98%	4.73%	1.44%	6.41%
IRE	70 Neutral	€3.19B	11.33	8.81%	5.15%	9.09%	16.49%
ACE	66 Neutral	€4.11B	11.86	13.68%	4.91%	-2.19%	14.21%
A2A	66 Neutral	€6.86B	8.29	16.17%	4.56%	2.73%	6.02%