Company Reports

Snam reported another solid quarter, with adjusted EBITDA increasing 9% year over year to EUR 797 million, driven by continued expansion of its regulated gas infrastructure business. Management reaffirmed full-year guidance while improving its net debt target by EUR 100 million to EUR 18.9 billion.

Snam reported first-quarter results ahead of company-compiled consensus, with adjusted EBITDA up 2% year over year to EUR 775 million, or 9.3% excluding the positive one-off deflator effect that benefited first-quarter 2025 results. Guidance was reaffirmed.

Snam operates three regulated segments: transportation, storage, and regasification/LNG. The transportation business, mainly natural gas pipelines, is the dominant earnings contributor, representing around 82% of group EBIT. Storage accounts for roughly 18%, while regasification remains marginal.

Snam reported strong 2025 results, surpassing its revised guidance. Its newly released strategic plan envisages total investments of EUR 13.7 billion through 2030, up from EUR 12.4 billion in the previous plan, supporting an expected adjusted EBITDA CAGR of 5.4% and net income CAGR of 4.5%.

The European utilities sector increased by nearly 8% since the end of September, outperforming the market by 5% due to stabilizing interest rates, solid third-quarter results, and hopes that artificial intelligence growth will boost electricity consumption in Europe.

Snam reported third-quarter results ahead of company-compiled consensus, with adjusted EBITDA up 9% year over year to EUR 735 million. Management raised full-year guidance to reflect the increase in the regulated asset base, or RAB, for 2025.

European utilities shares decreased by 3% since the end of June, underperforming the market by about 6%.

Snam reported second-quarter results slightly ahead of company-compiled consensus, with adjusted EBITDA rising 2.4% to EUR 731 million. Management confirmed its guidance for the full year.

Snam has three regulated segments: transportation, storage, and regasification/liquefied natural gas. The transportation segment, largely natural gas pipelines, contributes 80% of group EBIT. Storage contributes 20%, and regasification is only a marginal contributor. While these regulated assets benefit from efficient scale, we assign a no moat rating to Snam as regulation limits pretax allowed returns to ensure low prices for customers. For 2025, the regulator has decided to cut allowed returns by 40 basis points for transportation to 5.5%, 50 basis points for storage to 6.1%, and 50 basis points for regasification to 6.2%, amid a lower interest rate scenario.

European utilities rose by 12% in the second quarter, outperforming the market by 10%.

Snam reported first-quarter results just a touch above the company-compiled consensus, with adjusted EBITDA rising 8.3% year over year to EUR 761 million. Management reaffirmed full-year guidance.

Snam agreed to purchase a 25% stake in Open Grid Europe, Germany's largest independent gas network operator, from Abu Dhabi Investment Authority for an equity value of EUR 920 million. The deal is expected to close in the third quarter, subject to regulatory approvals.

European utilities increased by about 10% in the first quarter of 2025 thanks to good full-year results, attractive shareholder remuneration, and limited exposure to US tariffs. The latter was key in the material outperformance of the sector.

No-moat Snam delivered solid 2024 results that were largely in line with guidance. Management reaffirmed its financial targets for 2025, as outlined in its strategic plan, including adjusted EBITDA of EUR 2.85 billion and adjusted net income of EUR 1.23 billion. It now expects net debt to reach EUR 18.4 billion, or EUR 200 million below the previously stated target. The 2024 dividend was set at EUR 0.29 per share, aligning with management’s announced payout policy; this implies 3% growth versus 2023 and a juicy 6.3% yield. We maintain our EUR 4.70 fair value estimate and view the shares as fairly valued.

No-moat Snam reported sound third-quarter results, although slightly below market expectations. Management confirmed its full-year guidance for adjusted EBITDA of EUR 2.75 billion and adjusted net income of EUR 1.23 billion. With no changes to our forecast, we maintain our EUR 4.70 fair value estimate and see the shares as undervalued.

While wholesale power prices stabilized, government bonds’ yields fell on weak economic indicators and lower inflation in the US and Europe. Second-quarter results were boosted by very favorable hydro conditions that led to some guidance upgrades. This goldilocks scenario bolstered a rally in European utilities, enabling them to massively outperform the market and recover much of their earlier underperformance.

No-moat Snam reported solid second-quarter results and confirmed its 2024 guidance. With no changes expected to our forecasts, we maintain our EUR 4.70 fair value estimate. Dividend yield of 6.8% is very attractive and reflect the undervaluation of the shares.

Utilities have reversed part of their first quarter’s fall, thanks to a strong rebound in power prices. Moreover, the deep undervaluation of renewables developers has driven takeovers by big investment firms at very high multiples. Neoen’s main shareholders accepted an offer at 18 times the EBITDA. The sector is still significantly lagging the market in 2024 because of high interest rates. Should they fall, it would boost the sector.

Based on strong first-quarter performance, management has raised its 2024 financial targets for adjusted EBITDA, adjusted net profit, investments, and tariff RAB. Management has made no changes to its long-term strategic plan or estimates. We will factor these results into our model but do not expect a material change to our EUR 4.70 fair value estimate for no-moat Snam. The shares appear undervalued.

Snam has three regulated segments: transportation, storage, and regasification/liquefied natural gas. The transportation segment, largely natural gas pipelines, contributes 80% of group EBIT. Storage contributes 20%, and regasification is only a marginal contributor. While these regulated assets benefit from efficient scale, we assign a no moat rating to Snam as regulation limits pretax allowed returns to keep prices low for customers.