Barclays Sees Snam's Q1 2025 as a Hydrogen-Fueled Rebound

Barclays has thrown its weight behind Snam (BIT:SNM), forecasting a robust 13% year-on-year jump in net profit to €382 million for the first quarter of 2025, alongside a 6% revenue rise to €950 million. The investment bank’s Overweight rating and €5.40 target price reflect confidence in the Italian energy infrastructure giant’s ability to navigate macroeconomic turbulence while capitalizing on Europe’s green energy transition.

The Hydrogen Catalyst

At the heart of Barclays’ optimism is Snam’s aggressive push into hydrogen infrastructure, a sector poised to boom as the EU races to meet net-zero targets. Snam’s strategic investments in hydrogen pipelines, storage facilities, and partnerships with industrial players are positioning it as a leader in a market Barclays estimates could reach €200 billion annually by 2030.

Barclays analyst Jose Ruiz highlights that Snam’s regulatory tailwinds—including Italian government support for clean energy projects—are further boosting its margins. However, the firm warns that reduced gas storage incentives and lingering macroeconomic uncertainty, such as potential negative GDP growth in H2 2025, could test Snam’s resilience.

Valuation and Contrasting Views

Despite the risks, Barclays argues Snam remains underappreciated by the market. With a P/E ratio of 12.56 and a market cap of €15.88 billion, the stock appears attractively priced relative to its growth trajectory. The bank notes that Snam’s diversification into hydrogen and international projects—such as its joint venture in the US—could unlock long-term value.

Yet, not all analysts share this bullishness. While Kepler Capital reaffirmed a Buy rating, Citi recently downgraded the stock to Sell, citing concerns over investor sentiment and execution risks. Meanwhile, insider selling has risen, signaling internal skepticism that contrasts with Barclays’ external optimism.

Risks on the Horizon

Barclays acknowledges that Snam’s Q1 results will be tested by two critical factors:
1. Macroeconomic headwinds: If the bank’s prediction of a negative GDP print in late 2025 materializes, broader sector declines could pressure earnings.
2. Regulatory dependency: Snam’s success hinges on sustained policy support in Italy and the EU. A shift in political priorities or funding cuts could destabilize its projects.

Conclusion: A Bets on Green Energy Pay Off?

Barclays’ case for Snam rests on its strategic alignment with Europe’s energy transition, a theme that remains a policy and investor priority. With hydrogen investments and partner-driven revenue growth, Snam’s Q1 2025 results could validate its pivot to clean energy.

The numbers back this thesis: a €382 million net profit would mark Snam’s strongest quarterly performance since 2022, while its €950 million revenue underscores operational stability. Even with risks, Barclays’ €5.40 target—a 20% premium to current levels—suggests the market has room to catch up to Snam’s potential.

However, investors must weigh these positives against the broader economic backdrop. If Europe’s green policies hold and macro risks subside, Snam could outperform. But if the economy stumbles, even hydrogen’s promise may not insulate the stock. For now, Barclays is betting on the rebound—and the data supports a cautious, but constructive, outlook.