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On Monday, Stifel analysts revised their outlook on Saipem (BIT:SPMI) (SPM:IM) (OTC: SAPMF), downgrading the stock from Buy to Hold with a new price target of €2.50. The downgrade comes ahead of the company’s fourth-quarter and full-year 2024 earnings report, which is scheduled to be released on February 26 before the market opens. Stifel anticipates a revenue increase of approximately 11% year-over-year for the fourth quarter, along with a significant EBITDA improvement of 44%. The firm also forecasts Saipem’s order backlog to reach a robust €34 billion, which is 2.4 times the projected revenues for 2024.
Stifel’s analysis suggests that the full-year 2024 results should underscore the positive momentum in the offshore business sector. Nonetheless, the analysts express caution, pointing out that investor attention may be concentrated on the Courseselle and Thai Oil projects as they move into 2025. While guidance for 2025 is expected to be healthy, Stifel warns of potential operational challenges with these two projects that could lead to additional costs, influencing their decision to downgrade the stock to Hold.
The analysts’ statement emphasizes that although they anticipate strong full-year results for 2024, which would confirm the favorable conditions in the offshore business, concerns about the Courseselle and Thai Oil projects are significant. These projects are anticipated to be a focal point for investors looking ahead to 2025, and any operational issues could lead to unforeseen expenses.
Saipem has not yet commented on Stifel’s revised rating and price target. The market’s response to the new rating and the forthcoming earnings report will become clear as the company approaches its earnings release date later in February. Investors and stakeholders are now looking forward to Saipem’s financial disclosures and management’s commentary on the company’s performance and future outlook.
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