Eni outlook revised to positive by Moody’s Ratings following Italy’s outlook change

Investing.com -- Moody’s Ratings has updated the outlook for Eni S.p.A. (ETR:ENI) (Eni) from stable to positive, in line with the recent positive revision of Italy’s sovereign rating. The ratings agency has affirmed Eni’s long-term issuer rating at Baa1, senior unsecured debt ratings at Baa1, and other ratings including the Baa2 backed senior unsecured debt rating of its guaranteed subsidiary, Eni USA Inc.

The positive revision of Eni’s outlook follows the change in the outlook for Italy’s sovereign rating to positive on May 23, 2025. Moody’s expects Eni to maintain its strong business profile and credit metrics that are robust in relation to its current rating.

Eni’s Baa1 issuer rating is two notches above Italy’s Baa3 sovereign rating. This reflects Eni’s standalone credit strength and the global scope of its upstream operations. While current metrics could support a higher rating, Eni’s rating is limited to two notches above Italy’s sovereign rating due to the government’s 31.8% equity holding in Eni and its influence over the board of directors, as well as Eni’s domestically focused downstream business.

Factors supporting Eni’s rating include its large and geographically diverse asset base in the upstream business, a successful exploration track record, a comprehensive strategy to reduce its carbon footprint, prudent financial policies, strong credit metrics, and excellent liquidity.

However, the company’s rating is also influenced by its exposure to volatile oil and gas prices, significant exposure to non-OECD countries in the upstream business, a somewhat less diversified business profile compared to larger integrated oil and gas majors, and the risks related to the energy transition and pressure to reduce carbon footprint.

The potential for an upgrade or downgrade of Eni’s ratings is closely tied to Italy’s sovereign rating. An upgrade for Eni is unlikely without an upgrade for Italy. Conversely, a downgrade of Italy’s sovereign rating would likely lead to a downgrade of Eni’s rating. Changes in Eni’s financial profile, particularly a decline in the ratio of RCF/net debt below 20% at mid-cycle commodity prices, could also influence the ratings.

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