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Investing.com - Piper Sandler downgraded Tenaris S.A. (NYSE:TS) from Overweight to Neutral on Wednesday, while lowering its price target to $41.00 from $48.00. The $19 billion market cap company, currently trading at $36.29, maintains a strong "GREAT" financial health score according to InvestingPro analysis.
The downgrade comes as the investment firm sees a flattening in oil country tubular goods (OCTG) pricing after an initial 20% increase since November 2024. Piper Sandler cited concerns about increased imports following the removal of Section 232 quotas and their replacement with steel tariffs. Despite these concerns, Tenaris maintains robust financials with a healthy current ratio of 3.41 and minimal debt-to-equity of just 0.03.
The research firm noted that the combination of higher imports and slowing U.S. land drilling activity creates a "supply/demand air pocket" that could put pressure on Tenaris’s margins. This shift comes despite the initial pricing inflection that had been central to Piper Sandler’s previous Overweight rating established in December.
Piper Sandler also expressed concerns about potential political uncertainty in Argentina, which along with Suriname, had been viewed as providing Tenaris with a robust backlog for 2026. These international operations had previously been seen as offsetting broader international deceleration in the sector.
The investment firm acknowledged that Tenaris maintains an impressive shareholder return program through both dividends and buybacks, representing more than a 10% payout yield, but concluded that near-term OCTG pricing concerns warranted moving to a neutral stance. The company offers a 6.17% dividend yield with 40% dividend growth over the last twelve months. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other top stocks.
In other recent news, Bernstein SocGen Group has reiterated an Outperform rating on Tenaris S.A., maintaining a price target of $49.00. The firm cited improved macroeconomic visibility for 2026 as a key factor in their decision. Analysts observed a shift in tone from Tenaris’s management, highlighting increased optimism during the company’s second-quarter 2025 conference call. This contrasts with the more cautious stance taken in the first-quarter discussions. These developments suggest a potential positive outlook for the company according to Bernstein SocGen. Investors may find the reiterated rating and target price significant as they assess Tenaris’s future prospects.
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