Assessing Snam (BIT:SRG): Is There More Value Left After Recent Share Price Moves?

If you have been watching Snam (BIT:SRG) lately, you have probably noticed some modest ups and downs in the share price. While there has been no single major event driving the latest move, the shifts in trading could still catch the attention of investors wondering whether the market is signaling something beneath the surface about Snam’s future. With utilities often viewed as safe havens, any unexplained movement might prompt a closer look, especially when there is no breaking news or headlines to point to as the cause.

Zooming out, Snam’s year-to-date performance shows steady upward momentum, with the stock climbing 18% over the year and delivering a 19% total return to shareholders. That is especially interesting considering more muted performance in previous quarters and some minor pullbacks in recent weeks. While recent revenue and net income figures have grown, overall stock momentum appears to be building gradually rather than surging. This might suggest the market is cautiously optimistic but not racing ahead.

So is Snam’s current share price reflecting all the growth it has in store, or could there be value left on the table for those willing to take a closer look?

Most Popular Narrative: 5% Undervalued

According to the most widely followed narrative, Snam is currently valued about 5% below its calculated fair value, suggesting modest upside potential based on analyst consensus assumptions.

Strengthening energy security and supply diversification across Europe, highlighted by Italy's shift away from Russian pipeline imports toward increased LNG capacity and diversified sourcing (North Africa, Azerbaijan, U.S. LNG), will require ongoing infrastructure upgrades and expansion. This supports regulated revenue growth and improves long-term earnings visibility.

Curious about what powers this bullish forecast? The fair value model banks on several bold projections, such as multi-year earnings increases and a future profit multiple that would exceed industry averages. Want to discover the ambitious financial targets analysts believe Snam will hit to justify this price? Dig into the core assumptions and see if you agree with the narrative driving Snam's upside.

Result: Fair Value of €5.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, factors such as stricter regulation or a sharp decline in gas demand could challenge this growth story and limit Snam’s long-term upside.

Find out about the key risks to this Snam narrative.

Another View: Our DCF Model Offers a Different Take

While analysts see Snam as 5% undervalued based on typical forecasts, our DCF model tells a different story. It suggests the shares may actually be overvalued. Could these models be missing something?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Snam for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Snam Narrative

If you see things differently or would like to explore the numbers from your own perspective, you can build a unique narrative in just a few minutes. Do it your way.

A great starting point for your Snam research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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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