NEW YORK (
-- Eni SpA
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- ENI SPA has improved earnings per share by 16.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ENI SPA increased its bottom line by earning $4.62 versus $3.45 in the prior year. This year, the market expects an improvement in earnings ($5.75 versus $4.62).
- E's revenue growth trails the industry average of 39.6%. Since the same quarter one year prior, revenues rose by 17.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.54, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.73 is weak.
- E has underperformed the S&P 500 Index, declining 11.72% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The gross profit margin for ENI SPA is rather low; currently it is at 17.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.50% trails that of the industry average.
Eni SpA, an integrated energy company, engages in the exploration, production, transportation, transformation, and marketing of oil and natural gas. The company has a P/E ratio of 3.7, below the average energy industry P/E ratio of 8.3 and below the S&P 500 P/E ratio of 17.7. Eni SpA has a market cap of $73.1 billion and is part of the
industry. Shares are down 18.9% year to date as of the close of trading on Monday.
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