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Eni (E) Forges Partnership to Accelerate Energy Transition

Zacks Equity Research
·3-min read

Eni SPA E and FS Italiane Group have formalized their commitment to advancing energy transition through a newly signed letter of intent. The agreement, aimed at fostering joint initiatives, will focus on developing energy sources.

The collaboration between these industrial giants seeks to uncover fresh opportunities in the transportation, energy and materials sectors. This will be achieved through comprehensive feasibility studies, detailed analysis and experimentation with cutting-edge technological solutions.

A pivotal element of this strategic collaboration is the use of biofuels in trains and buses. Since July 2023, Eni and the FS Group have been testing the use of pure HVO biofuel as a replacement for diesel. This experimentation involves the latest generation of Trenitalia Blues hybrid trains operating in Calabria.

The biofuel, HVOlution, produced by Enilive from renewable sources, complies with the EU RED II Directive and can significantly reduce CO2eq emissions by up to 80%, depending on the raw materials used, compared with traditional fossil fuels.

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Specifically, the FS Group and Eni are committed to identifying and developing opportunities. These include the use of alternative fuels for transportation, intermodal logistics solutions and best practices in energy efficiency. The agreement also encompasses the creation of regulations, methodologies and technical standards, along with testing technologies related to sustainability and circular economy.

The past two years have shown that the oil and gas sector can play a pivotal role in shaping the new energy landscape, combining investment in low-carbon technologies and maintaining hydrocarbon production. The latest partnership signifies a crucial step forward in the journey toward a sustainable future, highlighting the importance of innovation and collaboration in achieving environmental goals.

In 2018, Eni and the FS Group signed a Memorandum of Understanding in Venice to collaborate on enhancing workplace safety. This agreement aims to share best practices and knowledge, emphasizing responsible behavior across all professional and industrial sectors, including subcontractors. The three-year partnership seeks to elevate safety standards and improve management processes.

Zacks Rank & Key Picks

Currently, Eni carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Sunoco LP SUN, and GeoPark Ltd. GPRK, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, focusing on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

The Zacks Consensus Estimate for AROC’s 2024 and 2025 EPS is pegged at $1.07 and $1.23, respectively. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes above 10 fuel brands, ensuring a stable revenue stream.

The Zacks Consensus Estimate for SUN’s 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. SUN currently has a Value and Growth Score of A, and a Momentum Score of B.

GeoPark, based in Hamilton, Bermuda, is an explorer, operator and consolidator in the oil and gas sector. The company primarily operates in Chile, Colombia, Brazil and Argentina.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $3.23 and $3.98, respectively. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. GPRK currently has a Value and Growth Score of A, and a Momentum Score of B.

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Eni SpA (E) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

Geopark Ltd (GPRK) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

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Zacks Investment Research