Yet another difficult day on the stock market for Enel. The largest Italian utility today plummeted to a 5 and a half year low, hitting an intraday low of € 4.15, with a daily decline of close to 4% and then closing at € 4.17 (-3.51%). Since the beginning of the year, ENEL has dropped by almost 41 percent. Today, all utilities suffer with over -3% also for Terna and Hera.
A nightmare 2022 that is jeopardizing the heavyweight status of Piazza Affari for the group led by Francesco Starace. At current levels, in fact, Enel capitalizes 42.5 billion euros, seeing ENI approaching dangerously, second in terms of market cap with 41.9 billion. Unlike Enel, ENI is experiencing a well-maintained 2022, with prices down by only 4% thanks to the support of the oil price.
The other big names in Piazza Affari are not far off: Stellantis is currently capitalizing 39.3 billion euros, while off the podium with 35.4 billion, Ferrari highlights that with -15% Ytd performed better than the market, recovering positions in the gotha of Piazza Affari.
Among the big names of the Ftse Mib only 17 stocks cross the 10 billion euro wall.
Looking outside Italy, it emerges as a deficient comparison in terms of valorisation of the major companies on our list: even in the Parisian Cac 40 there are as many as 14 companies that boast a market cap higher than that of Enel. The maximum weight of the Parisian list, the luxury giant LVMH, capitalizes over 300 billion, or almost 4 times Enel and Eni combined.
The difficulties faced by Enel and the other utilities
The dizzying increases in energy prices risk jeopardizing the solvency of users and this is an element that contributes to putting the prices of the companies under pressure. utilities of Piazza Affari more exposed to bills / payments / government interventions. The sector is also affected by the uncertainty of further government interventions to finance the planned budget measures (especially in the event of failure to approve the gas price cap at EU level).
In addition, the rise in real rates on the market weighs on sectors with a higher level of indebtedness such as utilities.
Utilities are now looking at developments on the front ceiling on the price of gas in Europto. The EU insists on seeking an agreement and the president of the EU Commission, Ursula von der Leyen, has announced that the EU will work with member states to reduce gas prices. In a letter, the EU Commission underlines that the price cap will have to be conceived guaranteeing security of supply and constitutes a temporary solution until a new index is developed to replace the FTT, which is no longer representative of our market. The letter also includes the possibility of introducing a cap on the price of gas used for the production of electricity and the obligation to purchase gas jointly between EU countries.
“The introduction of a gas price cap and solidarity measures at EU level are very important to avoid risks on receivables for companies in the sector. In our opinion, the possible steps forward on the price cap are positive elements for energy retailers (Enel, A2A, Iren, Hera and Acea) ”, explain the Equita SIM experts.