Here's Why Eni (E) is an Attractive Investment Bet Right Now
The positive trajectory in oil price is a boon for Eni's (E) upstream operations.
Eni SpA E has witnessed upward earnings estimate revisions for 2021 and 2022 in the past 30 days. So far this year, the stock, sporting a Zacks Rank #1 (Strong Buy), has gained 35.1%, outpacing the 32% improvement of the composite stocks belonging to the energy sector.
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What's Favoring the Stock?
The price of West Texas Intermediate crude is trading above the $70-per-barrel mark, highlighting a substantial improvement from the negative territory hit last April. Brent crude price, trading above the $75-per-barrel mark, has also skyrocketed from the pandemic-hit low mark last year.
The positive trajectory in oil price is a boon for Eni’s upstream operations. Eni has made more than 600 million barrels of oil equivalent (MMBoe) of discovered resources year to date. The significant discoveries amid recovering oil price are pretty compelling. This year, Eni has guided higher its exploration discoveries at 700 MMBoe from the prior estimate of 500 MMBoe, thanks to the key discovery in Ivory Coast.
Eni recently announced that its retail and renewable power business will be named Eni-Plenitude (Plenitude) at a capital markets event in Milan. Eni intends for the business unit's initial public offering (IPO) next year, subject to market conditions. This intended structural move reflects Eni’s strong focus on capitalizing on the mounting demand for renewables and green energy products. The intention also reveals Eni’s focus on creating more values through the energy transition. The company further said that the creation of the industrial and financial entity will help it to lower its Scope 3 emissions.
In its overall operations, Eni increasingly involves green energies. To accelerate the energy transition and promote renewable energy, the company entered into a three-year partnership deal with International Renewable Energy Agency (IRENA) on Sep 30.
Looking at its dividend history, it has been a clear picture that Eni’s dividend yield of 5.1% is attractive as compared to the Zacks Oil - Energy sector and Zacks S&P 500 composite.
Other Stocks to Consider
Other prospective players in the energy space include Whiting Petroleum Corporation WLL,Continental Resources, Inc. CLR and Callon Petroleum Company CPE. While Continental Resources carries a Zacks Rank #2 (Buy), Whiting Petroleum and Callon Petroleum sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum is a leading upstream energy company and is the top producer of crude oil in North Dakota. With oil price improving at a healthy pace, Whiting Petroleum expects to continue generating handsome cashflows while maintaining a healthy balance sheet.
Headquartered in Denver, CO, Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, WLL has gained 180.8% year to date, outpacing the 113.7% improvement of the composite stocks belonging to the industry.
Continental Resources is also a leading upstream energy company, having proven reserves in North Dakota and Oklahoma. The oil inventories of Continental Resources are among the best in the industry.
Headquartered in Oklahoma City, Continental Resources has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Considering the price chart, CLR has gained 202.9% so far this year, outpacing the industry.
Callon Petroleum is also a leading exploration and production company with a strong presence in prolific unconventional resources that comprise Permian Basin and Eagle Ford Shale play.
CPE has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, Callon Petroleum has gained 368.6% year to date, outpacing the industry.
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Eni SpA (E): Free Stock Analysis Report
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