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On Wednesday, TD Cowen analysts raised the price target for Tenaris (BIT:TENR) S.A. (TEN:IM) (NYSE: TS) shares to EUR44.00, a significant increase from the previous target of EUR21.00. Currently trading at $36.70 with a market capitalization of $19.75 billion, the stock has shown strong momentum with a 31% return over the past six months. The firm maintained its Buy rating on the stock. The analysts highlighted Tenaris’s unique position in the oilfield services (OFS) sector, noting that the company possesses a "moat" that sets it apart from competitors.
In their assessment, TD Cowen addressed concerns about Tenaris’s valuation, which some believe is based on expectations of margins declining to historical averages. According to InvestingPro analysis, Tenaris is currently undervalued, trading at an attractive P/E ratio of 10.17. The analysts argued that this view overlooks several important strategic developments that could impact the company’s financial performance. They also pointed out that Tenaris stands to gain from the U.S. steel tariffs, which could provide a competitive edge.
The analysts at TD Cowen expressed confidence in Tenaris’s ability to generate strong cash flow and emphasized their belief that this cash would be consistently returned to shareholders. This view is supported by the company’s impressive 6.1% dividend yield and strong free cash flow yield of 11%. The revised price target reflects a more optimistic outlook for Tenaris’s financial prospects and its ability to reward investors. For deeper insights into Tenaris’s financial health, which InvestingPro rates as "GREAT" with a score of 3.32, subscribers can access the comprehensive Pro Research Report, part of the analysis available for 1,400+ top stocks.
Tenaris operates within the global market, providing tubular solutions and services to the energy industry. The company’s performance is closely watched by investors interested in the OFS sector, which is influenced by factors like commodity prices, regulatory changes, and technological advancements.
The new price target set by TD Cowen suggests that Tenaris could potentially see its stock value nearly double from the previous target, signaling a bullish stance on the company’s future.
In other recent news, Tenaris S.A. reported its fourth-quarter 2024 financial results, revealing an adjusted net income of EUR449 million. This represents a 2% increase from the previous quarter but a notable 57% decrease compared to the previous year. The company’s operating income also declined to EUR467 million, marking a 12% drop from the prior quarter and a 43% decrease year-over-year, attributed to lower selling prices and volumes of tubular products. In response to these results, CFRA analyst Jeff Lye downgraded Tenaris’s stock rating from Hold to Sell, adjusting the price target from EUR18.00 to EUR15.00. The downgrade is influenced by the revised earnings per share forecast for 2025, which was lowered to $1.77 from $1.90. Lye also noted that the current 2025 price-to-earnings ratio of 11 times is significantly above the company’s three-year average, raising concerns over long-term impacts of potential U.S. tariff changes. Despite a 9% recovery in Oil Country Tubular Goods prices in North America since August 2024, Tenaris’s management forecasts flat sales and EBITDA for the first quarter of 2025. They anticipate a slight improvement in the second quarter but remain cautious about the latter half of the year due to uncertain U.S. tariff conditions.
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