Trade the A2A share!
A2A

Analysis before buying or selling A2A shares

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You are probably already familiar with the shares of companies in the energy sector such as ENI or the French company EDF, but did you know that other shares in this sector are also interesting in Europe? This is the case with A2A shares, which we present here in detail with explanations of their exact activities, information on their share price and the history of their performance on the stock market charts.

Elements to consider before selling or buying A2A shares

Analysis N°1

Firstly, it is very important to keep a close eye on the future development of nuclear energy, as the A2A Group relies heavily on this type of energy for its future profits. Given the current controversies surrounding this type of energy, the future situation may or may not be in A2A's favour.

Analysis N°2

In the same way, and in view of the current environmental issues, it is essential for A2A to succeed in distinguishing itself by implementing various plans to reduce CO2 emissions. In this way, the company will come under less pressure from the government and will be able to stand out from the competition with a green policy. Of course, we will also keep an eye on the development of green energies by the group with the investments or purchases made for this purpose.

Analysis N°3

Another important issue for the A2A Group is of course the control of production costs. The company must significantly reduce these costs in order to increase profitability and maximise profits.

Analysis N°4

The level of demand, which has tended to decline in recent years in the face of the general economic slowdown, should also be monitored. It is quite easy to find this information on Italian economic websites specializing in the country's economic statistics.

Analysis N°5

The Group faces strong competition from several large companies. It is therefore worth keeping an eye on the evolution of the market shares of each of these players in the Italian energy sector to see how the A2A Group is faring against these aggressive adversaries. In general, all news related to this competition should be studied.

Analysis N°6

Finally, it is of course essential to keep you informed of any changes in environmental standards in Italy. The government could indeed increase the constraints for companies in the energy sector and thus weigh on A2A's production capacities.

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General presentation of A2A

The A2A Group is currently one of the leaders in the production and distribution of electricity and gas in Italy, but the Group also manages other related activities such as the provision of environmental services, the transport and distribution of natural gas and the management of public lighting and district heating facilities.

Analysis before buying or selling A2A shares
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The major competitors of A2A

The A2A Group is currently one of the leaders in generation and distribution in Italy, but is of course not the only Italian company specialising in this sector. We will now present the main competitors of this group in its market with the major Italian electricity players.

Edison

This company is also an Italian company operating in the energy sector and specialising in the production and supply of electrical energy. It also offers natural gas.

Iren

This other Italian company is this time a public company which is in charge of the distribution and production of electricity as well as of the heating network. It was created following the merger between Enia and Iride in 2010. Iride was itself the result of the merger of AMGA and AEM Torino in 2006.

Enel 

Still among A2A's Italian competitors, there is the company Enel for Ente Nazionale per l'Energia Elettrica. Before its privatisation in 1999, this company was the country's national electricity company. Today, it is still the main producer in the country. The group has also become one of the country's leading multi-service providers, not only of electricity but also of water and natural gas. It is also one of the leaders in the production of electricity on an international scale with no less than 283.1 TWh of electricity and several billion m3 sold each year.

ENI 

This company, formerly known as Ente Nazionale Idrocaburi, is another direct competitor of A2A. This private national company specialising in hydrocarbons has existed since 1953 and was recently privatised in 1998. Even today, the Italian State holds nearly 30% of the capital of this company. ENI is active in several sectors including oil, natural gas, petrochemicals, power generation and engineering. It is present in more than 71 different countries and employs over 32,000 people worldwide.


The major partners of A2A

As we have just seen, the A2A Group has some strong competitors in the Italian market. Fortunately, however, the company can also count on some strategic allies, as it regularly enters into partnerships with other companies. Here are two concrete examples:

Suez 

In 2020, A2A entered into a partnership with the Suez Group for an industrial waste management system. The memorandum of understanding set up aims to create a player of excellence dedicated to the management of waste generated by the Italian industrial system. This agreement also provides for the definition of a new company with joint ownership for both industrial entities. This joint venture will therefore be able to combine assets, resources and strategic capabilities along the entire value chain of the environmental sector.

Renault 

Another strategic partnership was set up in 2009, this time with the car manufacturer Renault, as part of the development of zero emission mobility. For the Renault Group, this partnership is part of its strategy to market a complete range of electric vehicles. For the Italian A2A Group, this partnership is part of its activity in the field of sustainable development.

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Positive factors for A2A shares
The factors in favour of a rise in the A2A share price:

If, like many other individual investors, you are considering taking a strategic long position in the A2A share price, you need to consider all the factors that could influence the underlying trend of this asset over the longer or shorter term. The best way to do this is to compare the company's strengths and weaknesses to see how it is likely to perform in the coming months and years, and therefore how profitable it might be in the future. Because it is according to this profitability that the investors will decide to be interested or not in this share what will influence of course its stock exchange price. To begin this analysis, let's first look at the main strengths of this company, which are detailed below.

  • Firstly, the A2A Group is valued by industry analysts for its significant investment in research and development. Thanks to these capabilities, the Group remains one of the most innovative and is able to maintain its market share and even take it from some of its competitors without any problems.
  • The A2A Group is also recognized as one of the largest Italian companies. As a result, its stock attracts many individual and professional investors, which makes it very volatile. In addition, there are a large number of indicators available to traders here, which makes analysis easier.
  • A2A can also rely on its large workforce to produce and market its products and services. The Italian group currently employs more than 12,000 people, which is a considerable number for a company in this sector.
  • It goes without saying that the core business of the A2A Group, namely the provision of electricity and natural gas services to private and business customers, is in itself an advantage of the Group. Indeed, this sector of activity is not currently experiencing a crisis and is even booming, which enables A2A to continue to make profits. A2A can rely on its well-diversified energy portfolio because, unlike some of its competitors, it offers almost all types of energy to its end customers. This means that it can meet a wide range of needs and target all consumers.
  • Finally, one of the last assets of the A2A Group, and therefore indirectly of its stock market share, is of course the quality of its equipment. The Group relies heavily on state-of-the-art equipment and does not hesitate to use and take advantage of all the latest technologies in order to produce more energy at lower cost and thus maximise profits in the long term. Part of the group's R&D investment is dedicated to the creation of new state-of-the-art equipment.
Negative factors for A2A shares
The factors in favour of a drop in the A2A share price:

After reading the advantages and strengths of A2A and its issuing company, you may want to consider buying the stock now or adding it to your portfolio. But before implementing such a strategy, it is important to also be aware of this group's probable weaknesses, which, although fewer in number, can nevertheless weigh heavily in the balance and have a significant influence on the evolution of the underlying trend in A2A's share price. For this reason, we are going to present here the elements likely to bring down the price of this stock with the main known weaknesses of the company A2A.

  • Firstly, the lack of international development is of course one of A2A's main shortcomings. Indeed, most companies in the Italian energy sector do their best to operate in several countries, either in the European Union as a whole or at least in neighbouring countries. However, the A2A Group's activities are essentially concentrated on the Italian market alone. This naturally leads to a lesser capacity to diversify sources of revenue, but also to a non-negligible risk as regards the Group's geographical exposure to the Italian economy alone. It is clear that in the event of an economic crisis or a drop in purchasing power in Italy, energy companies like A2A will be the first to be affected. However, A2A will not be able to compensate for these losses on foreign markets.
  • Finally, although, as explained above, the A2A Group is one of the largest companies in Italy today, it also faces strong competition. Indeed, not only the energy companies in Italy, but also the large European companies in this sector are vying with each other in their imagination and efforts to attract consumers, offer services at attractive prices and thus take market share from A2A. There has been a significant increase in this competition, particularly from large foreign groups, which prevents companies like A2A from developing effectively in the rest of the world, since they already have a firm grip on a large part of the energy supply market.

A2A Group's weaknesses are obviously fewer than its strengths. However, if you want your positions in this stock to have a chance of turning a profit, you should also take the time to study their weight and importance in the eyes of analysts and shareholders. This way, you can better anticipate future movements in the stock and take wise positions based on those expectations. It is not the number of strengths or weaknesses that counts, but their importance for the future of A2A.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What is the current distribution of A2A shares?

As of July 2020, 27.4% of the A2A Group's share capital is owned by the Municipality of Milan and 27.4% by the Municipality of Brescia. Of the remaining shares, 3.5% are held by Motor Colombus Atel AG, 2% by the Municipality of Bergamo and 2% by Fingruppo Holding SpA. The remainder of the Group's shares are traded freely on the stock market. This is the free float of the company.

What are the holdings of the A2A Group?

The A2A Group holds stakes in several companies including Transalpina di Energia, a 50-50 joint venture with French utility EDF, a 6.4% stake in Swiss company ATEL Holding AG which is a private power producer, and a 50% stake in the Ergon Energia joint venture with Spanish company Endesa. Previously and until 2012, the group owned the French company Coriance which has since been acquired by KKR Infrastructure.

Should I systematically carry out a technical analysis of the A2A share?

To have the best chance of detecting convincing upward or downward signals for A2A stock, you must imperatively set up a technical analysis of this stock. Indeed, in addition to a quality fundamental analysis, this graphical study will help you validate your signals and maximize the effectiveness of your strategy.

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