Eni’s Strategic Moves Meet Analyst Caution as Shares Face Downgrade

EniADR US26874R1086

Shares of the Italian energy giant Eni experienced modest selling pressure on Friday. The movement followed a significant rating reduction from US investment bank JPMorgan, casting a shadow over a series of recent strategic victories announced by the company.

JPMorgan's analysts shifted their recommendation on Eni's stock from "Overweight" to "Underweight." Their rationale centered on a view that the equity, after a powerful 45% surge over the past year, is now fully valued. The team also expressed concerns that the momentum behind debt reduction is waning and issued profit forecasts for 2026/27 that sit 3% to 7% below the current market consensus. They further highlighted Eni's substantial exposure to volatile oil and gas prices, coupled with what they see as insufficient hedging from its downstream operations, as a key risk factor.

This critical assessment arrives despite Eni reporting several concrete advances in its strategic plan:

• Accelerated LNG Project: The second phase of the Congo liquefied natural gas (LNG) initiative has commenced ahead of schedule. The first LNG cargo from this project is now slated for export in early 2026.
• Securing Future Demand: The company has locked in long-term supply agreements, including a ten-year contract with Turkey and another with a Thai firm, with deliveries scheduled to begin in 2027 and 2028, respectively.
• Renewables Arm Growth: Plenitude, Eni’s renewable energy division, has agreed to acquire Acea Energia. This transaction would boost its European customer base to over 11 million, hitting a 2028 target two years early.

These developments are integral to Eni's broader strategy of expanding its annual LNG portfolio to approximately 20 million tonnes by 2030 while simultaneously scaling its renewable energy business. This approach, which Morningstar labels a "satellite model," involves spinning off future-growth segments like Plenitude to attract external capital.

Upcoming Catalysts and Market Sentiment

The current average analyst rating for Eni stands at "Hold," with a consensus price target of $34.60. Looking ahead, the market is anticipating specific milestones, including the inaugural LNG shipment from Congo in early 2026 and the expected finalization of the Acea Energia acquisition by June 2026, pending regulatory approvals.