Snam stock rises on robust strategic plan

Published 2025-01-22, 04:10 a/m
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Investing.com -- Shares of Snam SPA (MI:SRG) climbed 1.5% following the release of their strategic plan for 2025-2029, which outlined a higher-than-expected capital expenditure plan and an increase in their dividend policy.

The European energy infrastructure company announced a capital expenditure plan totaling €12.4 billion, a 12% increase over the Bloomberg consensus.

The strategic plan also revealed a regulatory asset base (RAB) compound annual growth rate (CAGR) guide that exceeds expectations set by Morgan Stanley (NYSE:MS), with a forecast of 6.4% compared to the anticipated ~5%. Furthermore, the plan indicates a net income CAGR of approximately 4.5% over the period, surpassing the Bloomberg consensus of close to 3%.

Despite a lower EBITDA CAGR guide of 5% compared to the previous plan's figure of over 7%, it aligns with the current consensus, suggesting some positive adjustments below EBITDA to achieve these figures.

In a move welcomed by investors, Snam has revised its dividend policy upwards. While the year-over-year growth for 2024 remains at 3% compared to 2023, the policy extends to 2029 with an annual growth of 4% and a maximum payout of 80%.

Notably, the payout is based on adjusted net income rather than earnings per share (EPS), which is a significant detail given that EPS includes hybrid costs, whereas adjusted net income is calculated before hybrid costs.

Morgan Stanley analysts commented on the strategic plan, stating, "We expect a small positive reaction in Snam shares post this morning's Strategic Plan release."

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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