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Investing.com -- Analysts at Stifel in a note dated Monday have upgraded Saipem SpA (BIT:SPMI) to a "buy" from "hold," citing a favorable risk-reward profile, strong first-quarter results, and an attractive dividend.
For the first quarter of 2025, Saipem reported a 15% year-on-year increase in revenue, reaching €3.52 billion, with adjusted EBITDA rising 34% to €351 million.
The positive performance was driven by improvements in both the Offshore and Onshore Engineering & Construction segments.
Onshore E&C saw a positive EBITDA margin of 1.3%, while offshore drilling revenues remained stable compared to last year.
The company’s net cash position stood at approximately €970 million (pre-IFRS16), underscoring its strong liquidity.
Saipem’s backlog at the end of the first quarter was €32.67 billion, providing visibility for future revenue, with a solid 2.2 times coverage of expected 2025 revenues.
The company has maintained its 2025 guidance, forecasting €15 billion in revenue, €1.6 billion in EBITDA, and €900 million in operating cash flow after lease liabilities.
While risks remain, particularly with legacy projects like the Courseulles offshore wind project and Thai Oil, Saipem has taken steps to manage these challenges through provisions.
Analysts at Stifel believe the company’s operational improvements and strategic focus position it well for future growth, particularly in the offshore sector.
With a favorable outlook, Saipem’s repositioning and strong financial standing make it an attractive investment opportunity.