both have corrected from the highs, what are the right prices?

Both Eni shares and Saipem shares have not particularly shone in recent months. After remaining on the crest of the wave throughout the first semester, from May onwards the performance of the two stocks was more sluggish. Proof of all this is in the monthly performance of the two listed companies: Saipem, which today trades at 2.21 euros, has lost over 6 percentage points in the last month while Eni has left 5 percentage points on the floor. If we leave aside the fixed time frames and look more at the graphs, the gap between the two oil sector stocks is even greater. Compared to the April highs, the Six-Legged Dog lost 15 percent while Saipem fell by 19 percent from the period’s highs.

After a long run, evidenced by the intense greens that emerge in the variations on an annual basis – +9 percent for Eni and +71 percent for Saipem, both of the two listed companies have retraced.

The fact that the respective shares can be purchased at a lower price compared to the maximum in April, this is excellent news for all those traders who have perhaps been waiting a long time to enter the two stocks or one of them. Buying shares in correction phases is one of the most used trading strategies. The fact that this mode of action is so widespread does not mean that it is valid regardless. It makes sense to buy a stock that has corrected only if the prospects are for an increase. Traders can verify this hypothesis both by resorting to technical analysis and by referring to the evaluations expressed by analysts.

This is precisely what we will do in this article. By comparing Eni shares with Saipem shares we will try to understand not so much which is worth investing more in, but which investor profiles the two listed ones are best suited to. The comparison between Eni and Saipem shares it will take place both taking into account the analysts’ assessments and from the technical analysis point of view.

Eni shares VS Saipem shares according to analysts

From the comparison between the assessments on Eni and those on Saipem, a minimum common denominator immediately emerges: the clear prevalence of positive assessments. A real flurry of buy ratings affects both the Six-Legged Dog and the engineering group.

This is the general orientation. It is then obvious that there are very different shades. According to Bloomberg data, Eni is buy for 18 analysts and hold for 9. Conversely, Saipem can boast 17 buy ratings and 6 hold. We remind you that buy is an indication of purchase while hold is a more neutral evaluation (keep in portfolio).

Moving on to the target prices, the 12-month average target price for Eni shares is 17.2 euros while the 12-month average target price for Saipem is 2.8 euros. However, I must not allow us to reach too hasty conclusions from these numbers. The “evaluation” is in fact made in light of the current market prices of the two securities. And so Eni shares which trade at 14.1 euros have an upside potential of around 27 percent, while Saipem shares, which are priced at 2.12 euros, have an upside potential of around 35 percent.

It is thanks to these percentages that it is possible to make a first weighty consideration: Saipem shares, from now on, have a greater margin of growth than that of Eni.

Be careful because this discussion is valid in the long term. In the short term, the two stocks appear to have different prospects. What makes the difference is the weight of the respective catalysts. On the one hand we have Saipem shares which, in recent weeks, have not had price sensitive news of any impact on their side. On the other hand, there is Eni which benefited from the announcement on the sale of a 30 percent stake in its upstream activities in Ivory Coast. The agreement is worth around 1 billion euros and weighs heavily on the Six-Legged Dog’s divestment strategy with which it aims to raise 8 billion in 4 years through sale operations.

Eni shares and Saipem shares compared with technical analysis

The technical picture of Saipem shares and that of Eni shares is different. As regards the Six-Legged Dog, prices were able to find excellent support in the 13.5 euro area. As today’s trend also confirms, short-term forecasts are for a reaction that could last until the values ​​come to terms with the resistance located between 14.1 and 14.2 euros.

If this level were also to be exceeded, then prices could even push up to 14.4 euros. At that point, volumes will establish the direction of values: if the stock remains attractive, then prices could even reach up to 14.6 euros and the violation of this level could then give further impetus even up to 15 euros. According to the technical analysis, therefore, the short-term outlook on Eni shares is positive (bullish).

As far as Saipem is concerned, it is clear that the volumes are no longer as brilliant as in April. All this can be seen in the prices. Saipem reached a top of 2.47 euros only to be overwhelmed by a decline that brought prices towards the 100-day average located between 1.97 euros and 2.02 euros. The stock is now trying to rise but remains close to this range. Basically in order to see a real rise, it will be necessary for the values ​​to reach 2.24 euros. Only in this case could a bullish trend be glimpsed which would in any case immediately come to terms with the resistance at 2.30 euros.

When to invest in Saipem shares and how much to invest in Eni shares: the final comparison

Having analyzed what the analysts say and taking into account the different technical picture, we can now draw the right conclusions. As previously said, it is not a question of establishing whether it is better to invest in Eni or Saipem shares but when (and to whom) the former is better and when (and to whom) the latter.

Eni lends itself better to more penetrating strategies while Saipem, lacking short-term dynamism, seems to be more suited to traders aiming for stability without however depriving itself of growth potential. In short, everything is relative and depends on the investor’s objectives: in some cases Eni is preferable, in others Saipem.

To buy Eni shares and to buy Saipem shares you can operate directly (purchase of real shares) or indirectly with CFDs. In the first case the best choice is to use a bank with a trading platform such as Fineco while in the second CFD brokers such as Dukascopy are fine.

• Fineco: bank with the best trading platform in Italy, allows you to buy real shares but also to trade with CFDs and the most exclusive super CFDs. There are two types of accounts including the new trading-only account with no fixed costs.

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• Dukascopy: CFD broker with leverage up to 1:30, features very low spreads and very fast order execution. The trading conditions are 100% transparent and in addition there is always the security of a Swiss banking group.

This content should not be considered investment advice. We do not offer any type of financial advice. The article is for informational purposes only and some contents are Press Releases written directly by our Customers.
Readers are therefore expected to do their own research to ensure the data is up to date. This site is NOT responsible, directly or indirectly, for any damage or loss, real or alleged, caused by the use of any content or service mentioned on the site https://www.borsainside.com.

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