IG: Strategic plan reinforces growth, attractive valuation

Research evidence excerpt

IG: Strategic plan reinforces growth, attractive valuation

40 73.29 78.07 87.08

estimates. The plan assumes over 100 ATEM awards by 2032 with €2.4bn Prev. 72.88 77.17 85.70

of associated investment, but are back-end weighted with ~80% in 2029-32 P/AEPS 15.5x 14.1x 13.2x 11.8x

with less visibility. In aggregate, the changes to our model lift our EBITDA DPS 43.20 47.64 50.75 56.61

estimates by ~2% and EPS by ~1% on average across 2026-32, ~2% below Prev. 47.37 50.16 55.71 Div Yield 4.2% 4.6% 4.9% 5.5%

consensus at EPS we believe driven by tenders.

WACC trigger increasingly likely but not in our base case EBITDA:EPS and EBITDADPS valuesis adjusted.are in euro cents per share.

We maintain our assumption of a flat 5.90% gas distribution WACC Keystakesshareholders:in Italgas, respectively.Snam and state-owned CDP entities own 11.4% and 26.05%

throughout the plan, in line with Italgas's assumption. However, All values in EUR unless otherwise noted.

compression in Italy's 10Y bond yield spread versus AA-rated peers means Priced as of prior trading day's market close, EST (unless otherwise noted).

the mark-to-market WACC has fallen to 5.5%, a 40bp decline that would

breach the 30bp trigger mechanism threshold. With three months of the

reference period remaining and other parameters still to be determined

later this year, we retain 5.90% as our base case, but note that activation

leading to -40bp changed in WACC would reduce 2027E EPS by ~5%. We

note that new WACC framework will begin in 2028, with all parameters and

formulas due to be reviewed.

Increasing PT to €11.2/sh, reiterate Outperform

Italgas trades at 14x 2026E PE, slightly below Snam (15x) and well below

Terna (19x) and the European network sector average of 16x, despite