General presentation of the Eni Company:
First of all, let's make sure we have sufficient knowledge about the Eni Company. You must know the precise activities of this company before starting to analyse its stock market. This is why we suggest you get some insight of its characteristics and its main sources of benefits.
The Eni group standing for Ente Nazionale Idrocarburi, is currently one of the leaders in the oil and gas sector in Europe.
The activities of the Eni group are divided into 5 major divisions, the most important of which is the purchase and sale of natural gas and the production of electricity. In 2019, the group produced 73.1 billion m3 of natural gas and 39.4 Twh of electricity. Eni is also in charge of transporting natural gas.
Another major activity of Eni is refining and distribution with 22.7 million tonnes of refined oil in 2019 and 32.7 million tonnes of petroleum products sold in Europe. The group also has 3 refineries located in Italy and operates a network of 5,411 service stations located in Europe.
Eni also offers energy services including offshore drilling, engineering, construction and maintenance of hydrocarbon production facilities, petrochemical plants and refineries.
It also carries out hydrocarbon exploration and production operations and finally petrochemicals with 4.3 million tonnes of petrochemicals sold in 2019 including ethylene, phenols, olefins, styrene, polymers and elastomers.
What are the strengths and weaknesses of Eni in its market?
While sound knowledge of the activities of the Eni group is of course essential to carry out a proper analysis, you must also know the strengths and weaknesses of the company before starting to analyse its price.
Among Eni's main strengths are strong research and development capacities which allow it to support its innovation and its capacity to respond to market demand.
In addition, the group benefits from a strong international presence since it is present in 90 countries around the world and employs over 75,000 people for this purpose. Eni also carries out operations for various industries around the world and is therefore present throughout the energy value chain through its numerous subsidiaries.
We’ll also highlight the fact that the group's retail operations in Europe remain stable over time and show a certain solidity.
Regarding the main weaknesses of the Eni group, the group and some of its subsidiaries have been accused and found guilty of certain corrupt practices and are under legal control. It is also a shame that the presence of the Eni group is largely limited to Europe, which limits the growth of its market share.
How to perform the fundamental analysis of the Eni share price?
We're now going to show you how to carry out a proper fundamental analysis of the Eni share price by telling you what the important elements to study are according to their probable influence on its stock market price.
You should be able to monitor changes in the diversification of the group's activities, which is moving towards products with high added value and tends to diversify its product portfolio, particularly in the chemicals sector. Another interesting element to study is the strategic disposition or acquisition transactions which are carried out by Eni with the aim of reorienting its activities.
It's also important to closely monitor the oil market and that of natural gas, paying attention to the evolution of world demand, especially European demand.
Like all other companies in the petroleum sector, Eni can also suffer the consequences of certain environmental regulations it is necessary to keep an eye on the evolution of these.
Finally, also closely follow the competition in this sector of activity and major news from Eni's main competitors in the market.
How to set up a technical analysis of the Eni share price?
While the fundamental analysis we just presented will allow you to try to anticipate future movements in the Eni share price, it should of course never be used alone and always in addition to a complete technical analysis.
The graphical analysis of the Eni share involves the study of historical and current price movements in order to identify known market configurations and therefore probable future trends. To do this, you need to use different technical indicators of trend or volatility.
Among these indicators are moving averages, MACD or Bollinger bands which are among the methods most frequently used by stock market investors and which are also offered on most charts.
It is also possible to use strategic thresholds such as pivot points, support and resistance levels which allow you to try to spot a reversal or an acceleration of the trend.