BIT:SRS

Stock Analysis Report

Executive Summary

Saras S.p.A. engages in the oil refinery business in Italy and internationally.

Rewards

Earnings are forecast to grow 14.33% per year

Risk Analysis

Dividend of 5.49% is not well covered by earnings or forecast to be in the next 3 years

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (0.6%) are lower than last year (2.6%)



Snowflake Analysis

Excellent balance sheet with limited growth.

Share Price & News

How has Saras's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SRS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-8.2%

SRS

-0.6%

IT Oil and Gas

0.05%

IT Market


1 Year Return

-25.0%

SRS

8.0%

IT Oil and Gas

17.3%

IT Market

Return vs Industry: SRS underperformed the Italian Oil and Gas industry which returned 8.5% over the past year.

Return vs Market: SRS underperformed the Italian Market which returned 18.6% over the past year.


Shareholder returns

SRSIndustryMarket
7 Day-8.2%-0.6%0.05%
30 Day-4.4%1.5%-0.4%
90 Day-24.8%2.5%6.0%
1 Year-20.7%-25.0%14.2%8.0%22.5%17.3%
3 Year1.6%-14.0%37.7%17.8%25.4%7.3%
5 Year75.3%32.5%62.7%25.3%23.0%-18.6%

Price Volatility Vs. Market

How volatile is Saras's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Saras undervalued compared to its fair value and its price relative to the market?

23.74x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SRS (€1.46) is trading above our estimate of fair value (€0.97)

Significantly Below Fair Value: SRS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SRS is poor value based on its PE Ratio (25.9x) compared to the Oil and Gas industry average (9.4x).

PE vs Market: SRS is poor value based on its PE Ratio (25.9x) compared to the Italian market (18.7x).


Price to Earnings Growth Ratio

PEG Ratio: SRS is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: SRS is overvalued based on its PB Ratio (1.3x) compared to the XE Oil and Gas industry average (1x).


Next Steps

Future Growth

How is Saras forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SRS's forecast earnings growth (14.3% per year) is above the savings rate (1.2%).

Earnings vs Market: SRS's earnings (14.3% per year) are forecast to grow faster than the Italian market (8.7% per year).

High Growth Earnings: SRS's earnings are forecast to grow, but not significantly.

Revenue vs Market: SRS's revenue (2% per year) is forecast to grow slower than the Italian market (3.8% per year).

High Growth Revenue: SRS's revenue (2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SRS's Return on Equity is forecast to be low in 3 years time (6.7%).


Next Steps

Past Performance

How has Saras performed over the past 5 years?

29.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SRS has a large one-off loss of €53.5M impacting its September 30 2019 financial results.

Growing Profit Margin: SRS's current net profit margins (0.6%) are lower than last year (2.6%).


Past Earnings Growth Analysis

Earnings Trend: SRS has become profitable over the past 5 years, growing earnings by 29.7% per year.

Accelerating Growth: SRS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SRS had negative earnings growth (-81.4%) over the past year, making it difficult to compare to the Oil and Gas industry average (-5.1%).


Return on Equity

High ROE: SRS's Return on Equity (4.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Saras's financial position?


Financial Position Analysis

Short Term Liabilities: SRS's short term assets (€2.1B) exceed its short term liabilities (€1.9B).

Long Term Liabilities: SRS's short term assets (€2.1B) exceed its long term liabilities (€512.9M).


Debt to Equity History and Analysis

Debt Level: SRS's debt to equity ratio (25.4%) is considered satisfactory.

Reducing Debt: SRS's debt to equity ratio has reduced from 85.5% to 25.4% over the past 5 years.

Debt Coverage: SRS's debt is well covered by operating cash flow (86.6%).

Interest Coverage: SRS's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet

Inventory Level: SRS has a high level of physical assets or inventory.

Debt Coverage by Assets: SRS's debt is covered by short term assets (assets are 7.4x debt).


Next Steps

Dividend

What is Saras's current dividend yield, its reliability and sustainability?

5.98%

Current Dividend Yield


Dividend Yield vs Market

company6.0%marketbottom25%2.0%markettop25%4.2%industryaverage5.7%forecastin3Years7.3%

Current dividend yield vs market & industry

Notable Dividend: SRS's dividend (5.49%) is higher than the bottom 25% of dividend payers in the Italian market (1.97%).

High Dividend: SRS's dividend (5.49%) is in the top 25% of dividend payers in the Italian market (4.19%)


Stability and Growth of Payments

Stable Dividend: SRS's dividend payments have been volatile in the past 10 years.

Growing Dividend: SRS's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (141.9%), SRS's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SRS's dividends in 3 years are not forecast to be well covered by earnings (106.7% payout ratio).


Next Steps

Management

What is the CEO of Saras's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Dario Scaffardi (61yo)

1.7yrs

Tenure

€1,438,427

Compensation

Mr. Dario Scaffardi has been the Chief Executive Officer of Saras S.p.A. since May 03, 2018 and has been its General Manager since October 2006 . Mr. Scaffardi served as an Executive Vice President of Sara ...


CEO Compensation Analysis

Compensation vs Market: Dario's total compensation ($USD1.60M) is above average for companies of similar size in the Italian market ($USD1.05M).

Compensation vs Earnings: Dario's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.3yrs

Average Tenure

57.5yo

Average Age

Experienced Management: SRS's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

10.7yrs

Average Tenure

57yo

Average Age

Experienced Board: SRS's board of directors are seasoned and experienced ( 10.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Angelo Moratti (56yo)

    Founder & Vice Chairman

    • Tenure: 10.8yrs
    • Compensation: €309.11k
  • Francesca Pezzoli

    Head of Investor & Media Relations

    • Dario Scaffardi (61yo)

      CEO, GM & Director

      • Tenure: 1.7yrs
      • Compensation: €1.44m
    • Giuseppe Citterio (62yo)

      Chief Oil & Energy Officer

      • Tenure: 1.3yrs
    • Vincenzo Greco (59yo)

      Chief Security ICT & Procurement Officer

      • Tenure: 1.3yrs
    • Marco Schiavetti (53yo)

      Chief Commercial Officer

      • Tenure: 1yrs
    • Franco Balsamo

      Chief Financial Officer

      • Tenure: 4.3yrs
    • Simona Berri (54yo)

      General Counsel & Head of Corporate Affairs

      • Tenure: 3.3yrs
      • Compensation: €93.75k
    • Carlo Guarrata

      Chief Industrial Operations Officer

      • Tenure: 1yrs
    • Patrizia Radice

      Chief Human Resources Officer

      • Tenure: 1yrs

    Board Members

    • Massimo Moratti (74yo)

      Chairman

      • Tenure: 1.7yrs
    • Gilberto Callera (80yo)

      Lead Independent Director

      • Tenure: 10.7yrs
      • Compensation: €125.00k
    • Angelo Moratti (56yo)

      Founder & Vice Chairman

      • Tenure: 10.8yrs
      • Compensation: €309.11k
    • Angelo Mario Moratti (46yo)

      Non-Executive Director

      • Compensation: €249.43k
    • Dario Scaffardi (61yo)

      CEO, GM & Director

      • Tenure: 1.7yrs
      • Compensation: €1.44m
    • Gabriele Moratti (41yo)

      Non Executive Director

      • Compensation: €135.81k
    • Isabelle Harvie-Watt

      Independent Director

      • Compensation: €80.00k
    • Giancarla Branda (58yo)

      Chairman of Statutory Auditors

      • Tenure: 4.1yrs
    • Laura Fidanza (46yo)

      Independent Director

      • Compensation: €80.00k
    • Adriana Cerretelli

      Independent Director

      • Compensation: €80.00k

    Company Information

    Saras S.p.A.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Saras S.p.A.
    • Ticker: SRS
    • Exchange: BIT
    • Founded: 1962
    • Industry: Oil and Gas Refining and Marketing
    • Sector: Energy
    • Market Cap: €1.260b
    • Shares outstanding: 941.78m
    • Website: https://www.saras.it

    Number of Employees


    Location

    • Saras S.p.A.
    • Via Dell'Unione, 1
    • Milan
    • Milan
    • 20122
    • Italy

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SRSBIT (Borsa Italiana)YesCommon StockITEURMay 2006
    S7ABST (Boerse-Stuttgart)YesCommon StockDEEURMay 2006
    0O2DLSE (London Stock Exchange)YesCommon StockGBEURMay 2006
    SRSMBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBEURMay 2006
    SAAF.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDMay 2011

    Biography

    Saras S.p.A. engages in the oil refinery business in Italy and internationally. The company operates through Refining, Marketing, Generation of Power By The Combined Cycle Plant, Generation of Power By Wind Farms, and Other Activities segments. The company sells and distributes oil products, such as diesel, gasoline, diesel fuel for heating, liquefied petroleum gas, virgin naphtha, and aviation fuel in the retail and wholesale markets. It also generates and sells electricity through an integrated gasification combined cycle plant with a total installed capacity of 575 megawatts; and a wind farm with a total installed capacity of 96 megawatts. In addition, it provides environmental protection services, including environmental engineering, environmental analysis and measurement systems, analytical and laboratory services, and environmental monitoring services; and offers reinsurance products. Further, the company owns and manages depots located in Arcola and Cartagena; and a retail network of 95 service stations. The company was founded in 1962 and is headquartered in Milan, Italy. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/21 20:38
    End of Day Share Price2020/01/21 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.