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On Thursday, Stifel began coverage on shares of Terna SpA (BIT:TRN:IM) (OTC: TERRF), the Italian electric utility company, assigning a Hold rating and setting a price target of EUR8.30. The firm noted that Terna has shown better performance than its peer Snam over the past year, attributing this to Snam's comparatively lower visibility on capital expenditure growth and returns in the gas infrastructure sector.
The analysis by Stifel highlighted that despite Snam's underperformance, gas is anticipated to play a significant role in supporting the energy transition in the coming decades. This view is based on the current industry trend where gas is considered a transitional resource towards more sustainable energy sources.
Stifel's coverage points out that Snam is actively working to adapt to the evolving energy landscape. The company is engaged in upgrading its infrastructure to better align with the energy transition. This involves refocusing its business mix to integrate more activities related to the transition to cleaner energy sources.
The Hold rating suggests that Stifel currently advises investors to maintain their position in Terna SpA shares without immediate actions towards buying or selling. The price target of EUR8.30 is set as a benchmark for the market value of Terna SpA shares, indicating the firm's expectation of the stock's potential to reach this value.
Investors and market watchers will likely be monitoring Terna SpA's performance closely, especially in relation to its role in the energy sector's shift towards more sustainable practices, as well as its comparison to industry peers like Snam.
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