Snam SpA

SRG: XMIL (ITA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€4.20	Lsfl	Tpmphnc

No-Moat Snam to See Higher Allowed Returns in 2024; Initiating With EUR 4.70 Fair Value Estimate

Tancrede Fulop

Nov 20, 2023

Business Strategy and Outlook

Snam has three regulated segments: transportation, storage, and regasification/liquefied natural gas. The transportation segment, largely natural gas pipelines, contributes 80% of group EBIT. Storage contributes 20%, and regasification is only a marginal contributor. While these regulated assets benefit from efficient scale, we assign a no-moat rating to Snam as regulation limits pretax allowed returns to keep prices low for customers.

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