If on the one hand, among the best performers of 2021, we find several banking stocks such as Unicredit, Banco BPM and Banca Generali, among the worst in Piazza Affari stand out the bad performances of Saipem (- 17% Ytd) and Enel (-16.5% Ytd); the latter, being the heaviest share of the entire Ftse Mib, acted as a brake on the entire leading index of Piazza Affari which, in any case, is about to end the year with a round of + 20% when there are a few sessions left to close of 2021 stock exchange.
With the current prices ofelectricity in Europe, which they have achieved new records, according to analysts at Barclays, the utilities sector is in a potentially favorable position. In particular, Peter CramptonBarclays analyst sees a likely earnings boost from rising electricity prices and this may foster greater positivity among investors.
Meanwhile, European gas and electricity costs have risen to new records and the index in recent weeks Eurostoxx 600 Utilities it is now at its highest level since August this year with a 10% rise from October. Also according to Crampton, the increase in prices “is not yet adequately reflected in the gains of consensus for public utility services”. “Concerns about low levels of gas storage in Germany this winter and related problems may continue to grow, resulting in high electricity prices and further major upgrades of the mark-to-market EPS, with energy prices potentially even higher “. Among the European utilities that have been left behind but could benefit from it, Enel SpA, EDF SA, Engie SA and RWE AG are mentioned.
Yesterday, Enel and Eni reached an agreement for the construction of charging stations for electric cars, of the two companies throughout Italy. At the moment Enel X and Eni’s Be Charge in fact, they manage the main charging networks for electric vehicles (EV) in Italy with around 20,000 charging points, a number that is constantly growing.
Several analysts consider Enel to be a good stock in the utilities sector. Looking at the consensus of analysts of Bloomberg we realize that 83% of them have a Buy view and only 1 analyst is a Sell on the stock. The 12-month average target price is € 8.73, with a potential return of over 26% from current prices.
Technical Analysis
The technical situation of Enel is improving in the short term, although some remain complications bearish techniques, with a loss of more than 15% in the last 6 months alone. In particular, after the bearish breakout of the trendline that accompanied the rise from the lows of March 2020 until May of this year where it failed to overcome the € 8.50 wall. Now the stock is lateralising between € 6.50 and € 7.30, in the event of further declines, the holding of the shares will be fundamental 6,50 euro to avoid sinking towards deeper targets in the 5.50 zone. On the contrary, on the upside, exceeding 7 euros could push prices up to the important static resistance in the 7.50 area. bullish trend since 2014. Current prices are in correspondence with the average of 200 on the weekly chart and are consolidating in the 6.70-7 euro area.