In a context deeply affected by the restrictions imposed to contain the spread of the virus, since March the monetary and fiscal policy authorities have taken significant measures aimed to counter the economic recession.
Several scenario elements have therefore supported the progressive recovery of Italgas share prices, after the price bottomed at the year-low of 4.11 euro on 12 March 2020.
Two supportive macro-drivers have been both interest rates, destined to stay at very low levels for a long time, and the new EU agenda, which has supported the whole utility industry, as it aims to relaunch economic growth through investments that facilitate the energy transition.
In the last few months, the recovery of Italgas shares have also counted on Company-specific factors: in addition to the new guidance presented on 11 June 2020 that was slightly above consensus expectations, the award of the tender for the Belluno gas concession and lately, on 27 July 2020, the release of half-year results that prove an uninterrupted growth path both for revenues and EBITDA. Leveraging on an increasingly digitalized and efficient structure, Italgas has shown its progress in carrying out its capex plan, thus paving the way for continued growth in the future. Even the 500-mln€ bond issue successfully placed in mid-June, proved the Company’s capacity in terms of access to credit. Italgas can also count on a cost of debt that is one of the most competitive in the industry.
An additional Company-specific driver not to be overlooked: on 20 May 2020, Italgas paid a 0.256 euro dividend per share, thus remunerating its shareholders in line with the policy set out in the 2019-2025 Business-Plan, in a landscape where many issuers had to reduce or cancel the earnings distribution to preserve financial balance.
In the last few trading days of July, the acceleration in the virus spread has made the equity markets puzzled about the likely pace of the recovery in the global economy in the second part of the year. Amid an earnings season that is showing a mixed picture of how pandemic has been handled across businesses, attention is being refocused on how individual companies comment on their outlook.
From this viewpoint, the Italgas announcement of a new Business Plan presentation in late October, having already confirmed the 2020 guidance at the time of the release of half-year results, helps reassure the market that the Company remains focused on long-term objectives.