Berenberg downgrades Italgas stock to Hold after sector-leading rally

Published 26/06/2025, 09:58
Berenberg downgrades Italgas stock to Hold after sector-leading rally

Investing.com - Berenberg downgraded Italgas SpA (BIT:IG) stock rating to Hold from Buy on Thursday, while raising its price target to EUR7.00 from EUR6.30, citing the stock’s strong year-to-date performance following its acquisition of 2i Rete Gas.

The Italian gas distributor’s shares have outperformed the sector this year after what Berenberg described as a "transformational acquisition" of 2i Rete Gas, which marks a significant shift in the Italian gas market and creates new opportunities for the company.

Berenberg forecasts Italgas will achieve EBITDA and net income compound annual growth rates of 11% and 12%, respectively, from 2024 to 2030, supported by the company’s plans to invest EUR15.6 billion over the period, with EUR14.5 billion excluding tenders.

The investment bank expects an 11% forecast compound annual growth rate in regulated assets and notes progress in Greece, along with developments in Italgas’s Energy Service Company and Water Services businesses.

Berenberg projects average dividend growth of 5% annually across 2024-2030 from a fiscal year 2025 dividend yield of 6.1% (rights adjusted), which it considers an attractive shareholder return with undemanding multiples, but expects the shares to "settle, following these new highs" after their recent strong performance.

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