Does Eni’s Share Price Rally After Renewable Energy News Signal Further Value in 2025?

• Thinking about adding Eni to your portfolio and wondering if it is currently good value? Whether you are a seasoned investor or just Eni-curious, understanding where the stock stands could make a serious difference to your next move.
• Eni’s stock has made some notable moves, jumping 7.0% over the past month and boasting a substantial 22.3% gain over the last year. These changes reflect evolving market sentiment and renewed optimism about its prospects.
• Recently, the company has been in the spotlight with ongoing developments in the global energy sector and updates on its green transition projects. News highlighting Eni’s expansion into renewable energy and its strategic deals with international partners has contributed to the positive momentum in its share price.
• As for value, Eni scores a 3 out of 6 on the Simply Wall St value checks. This means it appears undervalued according to half of the metrics examined. Let’s break down how different valuation approaches stack up for Eni and see if there is an even more insightful way to pin down its true worth, which we will reveal by the end of this article.

Eni delivered 22.3% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: Eni Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today’s value. For Eni, this approach looks at both analyst forecasts and extended projections to provide a comprehensive picture.

According to the latest data, Eni’s most recent Free Cash Flow was approximately €4.4 billion. Over the next decade, projections indicate gradual growth, with Free Cash Flow expected to reach about €5.2 billion by 2028. Analysts provide estimates for the next five years, and beyond that, Simply Wall St extends the projections to cover up to 2035, taking into account expected growth rates each year.

After discounting these future cash flows to present value, the DCF model calculates an estimated intrinsic fair value of €20.42 per share for Eni. This is a 21.9% discount compared to the current share price, suggesting that Eni’s stock price may be undervalued based on projected cash flows.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Eni is undervalued by 21.9%. Track this in your watchlist or portfolio, or discover 842 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Eni.

Approach 2: Eni Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely accepted method for valuing profitable companies like Eni. It compares a company's current share price to its per-share earnings, making it especially useful for businesses generating steady profits.

Growth expectations and perceived risk play a key role in determining what counts as a "normal" or "fair" PE ratio. Companies with strong growth prospects or lower risks typically justify higher multiples, while more volatile or slow-growing firms might warrant a lower PE.

Currently, Eni trades at a PE ratio of 18.5x. When compared to the Oil and Gas industry average of 13.2x and a peer average of 11.1x, Eni appears to be priced above both benchmarks. However, raw comparisons only tell part of the story.

This is where Simply Wall St's proprietary "Fair Ratio" comes in, offering a more nuanced benchmark. The Fair Ratio for Eni is 21.4x. Unlike basic peer or industry comparisons, the Fair Ratio reflects expected earnings growth, profit margins, risk profile, industry dynamics, and company size. It aims to give a truly tailored valuation guide.

Comparing Eni’s current PE of 18.5x with its Fair Ratio of 21.4x, the stock looks undervalued relative to its true fair value based on all key factors Simply Wall St considers.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Eni Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your story about a company, linking your perspective on Eni's future to specific financial forecasts, like estimates for revenue, earnings, and profit margins, to arrive at your own assumed fair value.

Narratives allow you to connect the dots between what is happening in Eni’s business, your assumptions about its future, and what you believe the stock is really worth. On Simply Wall St’s platform, you can find and create these Narratives easily in the Community page, joining millions of investors who use them to shape buy or sell decisions.

As new information comes in, such as quarterly results or major news, Narratives are dynamically updated, giving you a living forecast that grows with the company. For example, one Eni Narrative could reflect a bullish view, projecting €6.0 billion in earnings by 2028 with a high fair value of €17.5 per share, highlighting confidence in LNG expansion and margin growth. Meanwhile, another might be more cautious, assuming €3.7 billion in earnings and a lower fair value of €13.5 per share due to uncertainty around renewables and exposure to global risks.

By comparing these different stories to the current price, Narratives empower you to make clearer, more informed investment decisions tailored to your own outlook.

Do you think there's more to the story for Eni? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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