Major disposal plan for ENEL in Latin America to reduce debt
It has already been a few sessions that ENEL shares are struggling and do not follow the rise that is characterizing the bank-led Ftse Mib. To understand the seriousness of the weakness of this stock, just think that since the beginning of the week, the Ftse Mib Index has gained 1.01%, while ENEL has lost 3.87%. Yet something is moving and the current weakness could be an excellent buying opportunity.
What is happening to the company?
One of ENEL’s main problems is its high debt-to-capitalization ratio (A.D). In fact, the stock is placed in the top 20% of stocks with the highest DC on Piazza Affari. It must also be said, however, that the company is in excellent company given that it is preceded by the main titles in the banking sector such as Banco BPM, Intesa Sanpaolo, Banca Mediolanum, Mediobanca and Unicredit. The first place in the ranking, then, is occupied by Banca MPS. If, on the other hand, we look at the absolute debt, we discover that with around 95 billion euros, ENEL ranks third behind Unicredit and Intesa Sanpaolo, each with a debt of around 115 billion euros.
In order to reduce debtthe company started a very important disposal plan in Latin America. In fact, the parent company ENEL Americas is looking for buyers for the activities in Peru (estimated at around 3 billion euros) and in Argentina. Meanwhile, at the end of December 2022, it sold its assets in Brazil for a value of 1.5 billion euros used to reduce the debt.
In the long run, therefore, this policy of divestitures to reduce debt could lead to important benefits for shareholders.
For ENEL, the reduction may not be over yet: the indications of the graphic analysis
The title IT IS IN THE (MIL:ENE) closed the session of February 1 at 5.273 euros, down by 2.19% compared to the previous closing.
Averages set downwards for ENEL stock which could continue to fall
There are already three consecutive sessions down. Such a sequence hasn’t been seen since October 2022. The weakness of the stock, therefore, is evident though an important level is approaching from which an important trend reversal or a bearish acceleration could start. This level passes through €5.201 and represents the natural landing place of the ongoing decline.
A close below this level could favor a bearish acceleration with goal in area €4.79. The maximum extension of the decline, on the other hand, could go to be placed in the €4.37 area. Therefore, for ENEL the reduction may not be over yet.
On the other hand, if the support holds, it could trigger ENEL shares to rise. For a confirmation however, it will be necessary to resume the rise wait for the breaking of the recent highs in the €5.6 area.
