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

• Market Cap: €9.43B
• Dividend Yield: 4.11%
• Average Volume (3M): 2.48M
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.34
• Revenue Growth: -3.34%
• EPS Growth: 8.88%
• Country: IT
• Employees: 6,500
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.18
• Shares Outstanding: 1,015,518,070
• 10 Day Avg. Volume: 2,528,678
• 30 Day Avg. Volume: 2,483,487
• PEG Ratio: 0.99
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 1.75
• P/FCF Ratio: 21.30
• 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: €9.47
• Price Target Upside: 2.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: €10.50 ▲(13.15% Upside)

Italgas S.p.A. demonstrates strong financial performance with robust profitability and cash flow generation, though high leverage is a concern. Technical indicators show bullish momentum but suggest overbought conditions. Valuation is reasonable, with an attractive dividend yield but no significant undervaluation.

Positive Factors

Profitability

High profitability margins indicate efficient cost management and strong pricing power, which can sustain competitive advantages and shareholder returns over the long term.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, enabling Italgas to invest in growth opportunities, reduce debt, and return capital to shareholders.

Operational Efficiency

Robust operational margins reflect effective management and operational efficiency, supporting long-term profitability and resilience against market fluctuations.

Negative Factors

Revenue Growth

Inconsistent revenue growth can signal challenges in market expansion or competitive pressures, potentially impacting future earnings and strategic positioning.

High Leverage

High leverage increases financial risk, potentially limiting strategic flexibility and increasing vulnerability to interest rate fluctuations or economic downturns.

Equity Ratio

A low equity ratio indicates heavy reliance on debt financing, which could pose risks to financial stability and increase the cost of capital if not managed properly.

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

Company Description

Italgas S.p.A., together with its subsidiaries, engages in the distribution of natural gas in Italy. It is involved in the transportation of gas through local pipeline networks from the delivery points at the reduction and measurement stations interconnected with the transport networks to the points of final delivery to households, enterprises, etc. The company operated a distribution network of 74,397 kilometers. It also engages in metering activities; and distributes and sells water. The company was founded in 1837 and is based in Milan, Italy.

How the Company Makes Money

Italgas generates revenue primarily through the distribution of natural gas, which is regulated by national authorities. The company's revenue model is based on the tariff system, where it charges gas suppliers for the use of its infrastructure to deliver gas to end customers. Key revenue streams include fixed fees from customers for access to the gas network and variable charges based on the volume of gas distributed. Additionally, Italgas invests in network upgrades and expansions, which can lead to increased revenue over time. The company also collaborates with various stakeholders, including local governments and energy suppliers, to optimize its service offerings and expand its market reach, which contributes to its overall earnings.

Italgas S.p.A. Financial Statement Overview

Summary

Italgas S.p.A. demonstrates strong profitability with high gross and net profit margins, and robust EBIT and EBITDA margins. However, inconsistent revenue growth and high leverage pose potential risks.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.31B	2.51B	2.61B	2.18B	2.10B	2.06B
Gross Profit	2.12B	1.72B	1.62B	745.46M	721.78M	781.68M
EBITDA	1.21B	1.36B	1.20B	1.12B	1.02B	1.05B
Net Income	413.79M	478.85M	439.57M	407.29M	362.81M	384.63M
Balance Sheet
Total Assets	17.86B	11.97B	11.14B	11.03B	10.15B	9.12B
Cash, Cash Equivalents and Short-Term Investments	386.90M	362.85M	267.19M	451.95M	1.39B	664.14M
Total Debt	11.37B	7.19B	6.92B	6.55B	6.38B	5.41B
Total Liabilities	14.05B	9.18B	8.54B	8.64B	8.01B	7.15B
Stockholders Equity	3.48B	2.46B	2.28B	2.11B	1.89B	1.74B
Cash Flow
Free Cash Flow	-293.91M	206.05M	-289.23M	-229.06M	20.05M	14.61M
Operating Cash Flow	896.03M	1.10B	572.67M	548.17M	839.63M	761.66M
Investing Cash Flow	-2.74B	-809.13M	-857.60M	-1.28B	-813.74M	-771.63M
Financing Cash Flow	-274.64M	-136.88M	82.95M	-209.17M	701.84M	411.75M

Italgas S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:IG, the sentiment is Positive. The current price of 9.28 is below the 20-day moving average (MA) of 9.40, above the 50-day MA of 9.14, and above the 200-day MA of 7.44, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 50.70 is Neutral, neither overbought nor oversold. The STOCH value of 56.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
SRG	72 Outperform	€18.73B	13.41	17.62%	5.20%	-8.04%	30.49%
ASC	70 Outperform	€694.56M	8.06	9.91%	4.61%	20.11%	75.92%
IG	67 Neutral	€9.43B	16.76	―	4.11%	-3.34%	8.88%
A2A	66 Neutral	€7.06B	9.65	13.23%	4.41%	8.61%	-22.69%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
ACE	64 Neutral	€4.60B	9.97	14.57%	4.35%	-26.96%	25.00%
IRE	61 Neutral	€3.21B	10.89	9.51%	5.07%	10.48%	9.06%