Vallourec (VK) AI Stock Analysis

• Market Cap: €4.57B
• Dividend Yield: 9.68%
• Average Volume (3M): 560.69K
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.88
• Revenue Growth: -15.12%
• EPS Growth: -10.10%
• Country: FR
• Employees: 12,497
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.41
• Shares Outstanding: 234,359,150
• 10 Day Avg. Volume: 699,143
• 30 Day Avg. Volume: 560,692
• PEG Ratio: -0.46
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 9.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €20.67
• Price Target Upside: 6.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.65
• Revenue Forecast (FY): €3.97B

• Rating: 73 Outperform
• Price Target: €22.00 ▲(12.94% Upside)
• Action: Upgraded Date: 03/01/26
• Date: Action: Upgraded 03/01/26

The score is driven by improved financial strength (profitability, deleveraging, and solid free cash flow) and supportive technicals with price above key moving averages. Offsetting factors are the recent revenue/margin step-down and momentum indicators nearing overbought levels, while valuation remains reasonable with a notably high dividend yield.

Positive Factors

Deleveraged balance sheet

A materially lower debt-to-equity (~0.42 in 2025) and positive equity give Vallourec greater financial flexibility to fund capex, sustain dividends, or absorb downturns. This improved capital structure reduces refinancing risk and supports durable investment and operational plans over the next several quarters.

Strong free cash flow generation

Consistent positive operating and free cash flow in 2023–2025, with a 2025 rebound, indicates the business converts earnings into cash reliably. Strong FCF supports reinvestment, debt paydown and shareholder returns, and it underpins sustainability of operations despite sector cyclicality.

Leading tubular solutions franchise

Vallourec's position as a global leader in high-performance steel tubulars and related engineering services creates durable competitive advantages: deep technical expertise, long-term client relationships and contract-based revenues that support repeat sales, higher switching costs and sustained market access.

Negative Factors

Recent revenue and margin decline

Consecutive revenue declines and margin compression reduce scale economics and threaten the durability of recent profitability gains. Persistent top-line weakness can erode operating leverage, constrain FCF generation and jeopardize the balance-sheet improvements achieved through deleveraging.

Cyclicality and cash volatility

Historic swings to negative cash flow in 2021–2022 demonstrate the firm's sensitivity to commodity cycles and working capital. Such volatility can rapidly reverse improvements in leverage and liquidity during downturns, making capital allocation and debt servicing more uncertain over medium terms.

Concentration in cyclical end markets

Heavy exposure to oil & gas tubular demand ties revenue and pricing to drilling activity and commodity cycles. While diversification into power and construction helps, reliance on energy sector contracts leaves the company vulnerable to prolonged demand downturns, affecting predictability of earnings and cash flow.

Vallourec Business Overview & Revenue Model

Company Description

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, and internationally. It operates through Seamless Tubes and Specialty Products segments. The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; casings; tubings; VAM connections; rigid subsea line pipes, onshore rigid line pipes, and specialized tubes for transportation of oil and gas; and carbon steel and steel alloy tubes, hollow bars, and connections for the processing of industrial fluids, and oil and gas. Its oil and gas market services include assistance in lowering tubes, inspecting connections, and supervising assembly; repair services for its products and thread tubes inventory management, advisory, and training services; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; integrated solutions for the subsea line pipe market comprising welding, coating, insulation, logistics, and service agreements; tube coating and welding services. The company's power generation market products and services comprise seamless tubes for steam generators. Its industrial market products and services include tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections; tubular solutions for infrastructure construction; tubes and rings to manufacture cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and tubes and axles for automotive manufacturers. The company is also involved in the iron ore production business; and various projects concerning renewable energies. Vallourec S.A. was founded in 1899 and is headquartered in Boulogne-Billancourt, France.

How the Company Makes Money

Vallourec generates revenue primarily through the sale of its steel tubular products, which are used in various applications including oil and gas exploration, power generation, and construction. The company's revenue model is largely based on long-term contracts with major energy companies and industrial clients, ensuring a steady stream of income. Key revenue streams include the sale of seamless and welded tubes, as well as related services such as technical consulting and project management. Additionally, Vallourec benefits from strategic partnerships with industry leaders, facilitating access to new markets and enhancing its product offerings. The company's ability to adapt to market demands and invest in innovative technologies also contributes to its earnings, positioning it favorably within the competitive landscape.

Vallourec Financial Statement Overview

Summary

Financials reflect a solid turnaround versus 2020–2022: profitable 2023–2025, reduced leverage (debt-to-equity ~0.42 in 2025), and strong operating/free cash flow. The main risk is recent revenue contraction and margin compression versus 2023, consistent with cyclical demand/pricing pressure.

Income Statement

Profitability has materially improved versus the 2020–2022 loss period, with solid operating and net margins in 2023–2025 and positive earnings in each of those years. However, the top line has been shrinking recently (revenue down in 2024 and sharply down again in 2025), and margins have also stepped down from the 2023 peak—signaling weaker demand/pricing and a less supportive operating environment.

Balance Sheet

Leverage has been reduced meaningfully since 2022, with debt-to-equity improving to ~0.42 in 2025 from higher levels previously, and equity remains firmly positive. Returns on equity are also healthy in 2023–2025, consistent with a stronger earnings base. Key risk: the business has shown balance-sheet fragility in prior downcycles (including negative equity in 2020), so the capital structure is improved but not immune if profitability and volumes soften further.

Cash Flow

Cash generation is strong in the last three years, with positive operating cash flow and free cash flow in 2023–2025 and a notable rebound in free cash flow in 2025 versus 2024. Free cash flow tracks earnings reasonably well in 2023–2025 (free cash flow at roughly two-thirds to ~70% of net income), supporting earnings quality. Main weakness is volatility earlier in the period (negative operating cash flow and free cash flow in 2021–2022), highlighting cyclicality and sensitivity to working capital swings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.81B	4.03B	5.11B	4.88B	3.44B
Gross Profit	933.00M	1.19B	1.59B	1.08B	836.58M
EBITDA	798.00M	854.00M	1.20B	104.83M	514.66M
Net Income	354.00M	452.00M	495.91M	-366.38M	39.55M
Balance Sheet
Total Assets	4.88B	5.53B	5.71B	5.36B	4.75B
Cash, Cash Equivalents and Short-Term Investments	965.00M	1.10B	899.95M	558.42M	627.32M
Total Debt	964.00M	1.17B	1.53B	1.75B	1.44B
Total Liabilities	2.49B	2.93B	3.49B	3.67B	2.94B
Stockholders Equity	2.31B	2.51B	2.16B	1.64B	1.76B
Cash Flow
Free Cash Flow	384.00M	321.00M	498.26M	-215.66M	-283.47M
Operating Cash Flow	560.00M	488.00M	710.85M	-24.99M	-145.81M
Investing Cash Flow	-106.00M	71.00M	-129.69M	-162.09M	-29.59M
Financing Cash Flow	-499.00M	-403.00M	-214.82M	90.92M	-603.86M

Vallourec Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:VK, the sentiment is Positive. The current price of 19.48 is above the 20-day moving average (MA) of 18.96, above the 50-day MA of 17.63, and above the 200-day MA of 16.31, indicating a bullish trend. The MACD of 0.57 indicates Negative momentum. The RSI at 63.46 is Neutral, neither overbought nor oversold. The STOCH value of 74.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:VK.

Vallourec Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CBE	74 Outperform	€1.71B	16.00	―	1.35%	10.55%	13.50%
VK	73 Outperform	€4.57B	13.02	16.47%	9.68%	-15.12%	-10.10%
JCQ	63 Neutral	€516.20M	54.10	1.38%	0.99%	-7.44%	85.42%
AKE	62 Neutral	€4.40B	74.25	2.27%	7.05%	-2.71%	-57.75%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
NK	47 Neutral	€1.99B	-4.86	-5.29%	6.28%	-7.71%	-451.19%
ERA	41 Neutral	€1.67B	-3.50	-7.36%	2.83%	-6.91%	-222.35%