** Citi cuts Italy's Snam MIL:SRG to "sell" from "neutral" as it expects a lower-than-sector-average long-term EPS growth and leverage constraints in 2025-26
** It sees a 2% 5 year EPS CAGR for the gas grid operator that is three times lower than the 6% it anticipates for the sector average
** Snam's recent 920 million euros ($1.04 billion) acquisition of a 24.5% stake in Germany's Open Grid Europe (OGE) is "expensive" and carries an EPS accretion limited to 1%, Citi notes
** At the same time, OGE's acquisition increases pressure on the "already stretched" Snam credit metrics, it says
** As a result, the gas grid operator will have less flexibility to react to any negative market changes that may occur in 2025-2026, Citi adds
** Out of 20 analysts that cover Snam, 12 rate the stock "strong buy" or "buy", five rate "hold" and three rate the stock "strong sell" or "sell"
($1 = 0.8864 euros)