Tesmec: Buy Rating Backed by Structural Growth, Deleveraging, and Valuation Upside Despite Temporary Trenchers Weakness

Enrico Coco, an analyst from Intermonte, maintained the Buy rating on Tesmec S.p.A.. The associated price target is €0.19.

Enrico Coco has given his Buy rating due to a combination of factors, including Tesmec’s solid positioning in structurally growing Energy and Rail markets and the company’s improving balance sheet profile. Despite FY25 EBITDA coming in below forecasts, revenues grew year on year, operating cash generation was positive, and net debt declined meaningfully, helped by disciplined working capital management and controlled capital expenditure.

At the same time, the weak performance in Trenchers is assessed as temporary, linked to project-specific issues in Saudi Arabia and Australia rather than a structural deterioration of the business. Management’s guidance points to higher EBITDA and further deleveraging in 2026, while the updated DCF valuation and target price imply attractive upside at current levels, with Tesmec trading at undemanding EV/EBITDA and P/E multiples versus its earnings growth potential.