Saipem stock holds Overweight rating, JPMorgan maintains EUR3.40 target

On Wednesday, JPMorgan reaffirmed its Overweight rating and EUR3.40 price target on Saipem (BIT:SPMI) (SPM:IM) (OTC: SAPMF), following the company’s fourth-quarter 2024 results and the announcement of its merger with Subsea 7 (OTC:SUBCY) (SUBC). The merger is expected to create a global leader in the engineering and construction sector.

Saipem reported fourth-quarter earnings with EBITDA rising by 4% compared to market consensus, and a year-end net cash position of €23 million, which was in line with expectations. The company’s full-year 2025 guidance also aligned closely with Bloomberg consensus, though capital expenditures were slightly higher than anticipated.

The strategic plan update from Saipem suggests a significant increase in future earnings before interest, taxes, depreciation, and amortization (EBITDA). JPMorgan analysts point to an approximately 15-20% upgrade to the full-year 2028 EBITDA estimates compared to Bloomberg consensus. Moreover, Saipem’s management has declared dividends of €333 million for the full-year 2025, which is substantially higher than JPMorgan’s projection of €63 million. The company also anticipates a minimum dividend of $300 million for the full-year 2026.

In terms of shareholder returns, Saipem has revised its distribution policy, now aiming to return at least 40% of free cash flow (post leases) to shareholders, up from the previous range of 30-40%. This reflects the company’s confidence in its medium-term financial performance and commitment to shareholder value.

While JPMorgan has slightly reduced its EBITDA forecasts for the full-year 2025 and 2026 by 8% and 4%, respectively, to align with consensus, it has increased its estimates for the full-year 2027 and 2028 by 4% and 15%. This adjustment reflects the positive outlook stemming from the updated strategic plan and the anticipated benefits of the merger with SUBC. JPMorgan’s continued support for Saipem is evident as the firm maintains its December 2026 price target of EUR3.40 and positions Saipem as the top pick in the oilfield services (OFS) sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.