Italgas, founded in 1837 and headquartered in Milan, Italy, is a provider of natural gas distribution, water management, energy efficiency, and digital solutions, supporting utilities innovation and the energy transition across Italy and internationally. The company operates through four segments including Gas distribution, Water service, Energy efficiency and Corporate.

Powering Europe's energy future

On October 30, 2025, Italgas announced its 2025-2031 Strategic Plan, targeting €16bn in total investments and focusing on developing and digitizing gas networks in Italy and Greece. In addition, the company aims to expand its renewable gas capacity, supported by a targeted investment of €13.2bn for gas infrastructure, €1.5bn for ATEM tenders, and €0.8bn for water and energy efficiency. Italgas aims to achieve €3.0bn EBITDA, €20.0bn regulated asset base, and EPS to grow at a CAGR of 10% by 2031.

Robust FCF

Italgas posted a steady performance over FY 21-24, achieving a revenue CAGR of 5.4%, reaching €2.5bn in FY 24, driven by strategic infrastructure investments and acquisitions, steady demand for gas distribution, and digital transformation initiatives. EBITDA registered a CAGR of 8.5%, reaching €1.3bn. Consequently, margins improved from 46.4% to 50.7%.

Over FY 21-24, FCF grew from €12.4m to €401m, supported by robust growth in cash flow from operations, from €840m to €1.1bn.

The company posted robust Q3 25 results, supported by strong revenue growth, driven by an increase in gas distribution regulated revenues and favorable impact of the 2i Rete Gas acquisition. In addition, EBITDA margin expanded by 506bp.

In comparison, A2A S.p.A., a local peer, reported a revenue CAGR of 3.5% over FY 21-24, reaching €12.6bn in FY 24. EBITDA grew at CAGR of 18.2% to €2.1bn, with margin expansion from 11.0% to 16.6%.

Strong returns & yield

Over the past year, the company's stock delivered returns of 67.6%. In comparison, A2A posted lower returns of 8.8%. The company paid an annual dividend of €0.4 in FY 24, resulting in a dividend yield of 7.5%.

Italgas is currently trading at a P/E of 13.8x, based on the FY 25 estimated EPS of €0.7, which is higher than its 3-year historical average of 9.7x and that of A2A’s valuation of 10.6x. The company is currently trading at an EV/EBITDA multiple of 11.0x, based on FY 25 estimated EBITDA of €1.9bn, which is higher than its 3-year historical average of 8.9x and A2A (5.9x).

Italgas is monitored by 15 analysts, eight of whom have ‘Buy’ ratings and seven have ‘Hold’ ratings for an average target price of €9.7, implying a minimal upside potential of 1.5% over the current market price.

Analysts’ views are supported by an estimated revenue CAGR of 18.8%, reaching €3.0bn over FY 24-27. EBITDA is estimated to rise at a CAGR of 19.2% to €2.3bn with margin expansion of 79bp to 76.7% in FY 27. Analysts estimate a net profit CAGR of 19.7% to €821.9m. Meanwhile, for A2A, analysts estimate an EBITDA CAGR of 0.2% and a net profit CAGR of -10.1% over FY 24-27.

Overall, Italgas posted consistent operational excellence through strategic investments and successful portfolio expansion, while its ambitious long-term plan positions the company for leadership and further value creation. However, it may encounter risks from regulatory changes, shifting energy market dynamics, interest rate fluctuations, inflation, and evolving environmental policies.