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June 2023

03. Solid fundamentals still not fully reflected in Italgas’ share price
Data di pubblicazione:

Despite an upward start to the year, investors have recently returned to a risk-averse attitude on the stock market, while waiting to assess whether the tensions in the banking sector will produce negative effects on economic growth and induce Central Banks to adopt less restrictive policies.

Italgas’ share price – although partly penalized by belonging to the defensive utilities sector, in a very volatile market favoring cyclical stocks or those benefiting from high interest rate levels – was nevertheless able to count on solid fundamentals, also confirmed by the release of 2022 annual results.

The average target price of brokers covering the stock, at 6 euro, continues to indicate that at current price levels there remains significant room for potential appreciation.

Official listing: Euronext Milan

Segment: Blue Chips

Type: Ordinary shares


Index membership: FTSE MIB, FTSE Italy All-Share, Euro Stoxx, Euro Stoxx Utility, Dow Jones Sustainability World, FTSE4Good



Number of outstanding shares: 810,245,718

ISIN Code: IT0005211237

Reuters code: IG.MI

Bloomberg code: IG IM

Price as of 24 March 2023: 5.4 euro

Mkt cap as of 24 March 2023: 4.38 billion euro

Investor Relations:

Anna Maria Scaglia
Armando Iobbi

Equity markets started 2023 with a sharp rally

After the end of 2022, which many traders described as an ‘annus horribilis’, the leading stock indices started 2023 with a strong rebound, quickly regaining the levels before the outbreak of the war in Ukraine.

The reopening of China, leaving behind the zero-coupon policy, and the expectation of an imminent end to the Central Banks’ rate increase cycle, were the factors that drove the rebound in equity prices, as economic growth proved to be less vulnerable than feared towards the threats of restrictive monetary policies. In Europe, the benefits of a progressive stabilization of energy commodity prices also drove the recovery movement of indices. This explains the outperformance of the Eurozone indices, which in 2022 had been heavily penalized by investors’ concerns about the greater exposure of European countries to the effects of the energy crisis.

In this context, a technical element also added strength to the rebound, represented by hedge fund purchases to cover short positions.

In the first weeks of the year, the FTSE MIB, the blue-chip index of the Italian stock market, posted a particularly brilliant performance, outperforming the Eurostoxx 50, due to the strong weight of banking stocks, favored by rising interest rates.

In general, the rally in the first weeks of 2023 was driven not only by banking stocks, but also by those in the automotive, TLC and energy sectors. With investors in risk-on mode, the performance of bond-proxies and defensive stocks, such as real estate and utilities, was weaker.

In this context, Italgas stock gained significantly, leading the price from 5.19 euro at the end of 2022 to quickly reach a high of 5.67 on 9 February 2023. Although the stock could not leverage on its belonging to one of the market’s favored sectors at this stage, it still recovered on the basis of the company’s solid fundamentals.

February already showed up as a month with mixed trends

After a very positive start, investors started to take profits in February, adopting a more risk-averse attitude, in a macroeconomic picture that presented very strong data, according to which the central banks’ fight against inflation seemed not yet over, and the peak in interest rates was fading away.

Therefore, also the Italgas shares retraced: from the high of 9 February, the share price corrected to reach a new low for the year at 5.16 euro on 9 March.

And in this scenario, in which the market was still focused on inflation and unemployment in anticipating the Fed’s moves, the news of the bankruptcy of the Silicon Valley Bank in the United States broke on 10 March, which was quickly followed by the stock market collapse of Credit Suisse, with the takeover-rescue by UBS taking place on 19 March.

Uncertainty dominates the current mood, but sound 2022 results reward Italgas stock

Although there is broad consensus that the situation in the banking sector today is structurally very different from the one that led to the Lehman crash, the memory of what happened on the stock market in 2008 led investors towards an attitude of risk aversion.

The tensions created in the banking sector resulted in very restrictive credit conditions, which anticipated the effects of further rate raises by Central Banks.

Therefore, investors remain focused on assessing the effects on growth of these new restrictive credit conditions, which could in fact bring closer the arrival of more accommodative monetary policies.

On the other hand, starting from 10 March, Italgas stock set a new recovery movement, triggered by the release of healthy annual results, which confirmed the Group’s ability to produce continuous growth, along the trajectory of the Strategic Plan, despite the difficult external context.

Average target price is over 10% higher than recent prices

The average target price of the 15 brokers that cover Italgas shares today stands at 6 euro: a level that indicates ample room for potential revaluation compared to recent prices. Target prices range from a low of 5.5 euro to a high of 7 euro. Recommendations are generally favorable, with eight analysts suggesting buying the stock (between Buy, Outperform or Accumulate) and the remaining seven presenting a neutral opinion (between Hold, Market performer or Equal Weight).


Ownership structure