Tenaris SA (TS) AI Stock Analysis

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Tenaris SA

(NYSE:TS)

67Neutral

Tenaris SA's stock is supported by strong financial performance, including robust profitability and a solid balance sheet. However, technical analysis indicates bearish trends, and challenges highlighted in the earnings call, such as declining sales and geopolitical risks, weigh on the outlook. The valuation remains attractive, providing some offset to the risks. Overall, the stock is moderately attractive, with a balance of strengths and risks.

Positive Factors

Company Resilience

The business continues to show resiliency in a choppy oilfield services market and trades at an attractive 10% FCF.

Financial Performance

4Q Adj EBITDA of $659MM was ~10% above consensus, extending the streak of quarterly beats to 15 in a row, with an average of 10% upside.

Market Expansion

Recovery and growth of Mexico and Argentina OFS activity.

Negative Factors

Market Uncertainty

The prospect of new tariffs on U.S. steel and steel product imports creates a lot of uncertainty as TS does import some pipe and steel materials.

Regional Challenges

Mexico remains depressed, and it seems TS has little visibility and their outlook does not reflect.

Stock Performance

The weakness in the stock can be attributed to slightly less certainty around the magnitude of repurchases to be announced in May.

Tenaris SA (TS) vs. S&P 500 (SPY)

Market Cap

$19.53B

Dividend Yield4.03%

Average Volume (3M)1.80M

Price to Earnings (P/E)9.2

Beta (1Y)0.86

Revenue Growth-15.77%

EPS Growth-45.74%

CountryUS

Employees25,874

SectorEnergy

Sector Strength53

IndustryOil & Gas Equipment & Services

Share Statistics

EPS (TTM)3.60

Shares Outstanding583,944,400

10 Day Avg. Volume2,559,327

30 Day Avg. Volume1,799,738

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.55

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$43.40

Price Target Upside30.49% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Tenaris SA Business Overview & Revenue Model

Company DescriptionTenaris SA is a leading global manufacturer and supplier of steel pipes and related services primarily for the energy industry and other industrial applications. Headquartered in Luxembourg, the company operates in several sectors, including oil and gas, power generation, and industrial and automotive sectors. Tenaris offers a comprehensive range of products such as seamless and welded steel tubes, premium connections, and coiled tubing, serving customers worldwide with a focus on enhancing operational efficiency and reducing environmental impact.

How the Company Makes MoneyTenaris SA generates revenue primarily through the production and sale of steel pipes and tubular products. The company's key revenue streams include the sale of seamless and welded pipes used in the oil and gas industry's exploration and production activities, which constitute a significant portion of its income. Tenaris also provides value-added services such as technical consulting, pipe management, logistics, and supply chain services, which contribute to its earnings. Additionally, the company benefits from strategic partnerships and long-term agreements with major oil and gas companies, which ensure a steady demand for its products and services. The company’s global presence and its ability to provide tailored solutions to meet customer-specific needs further enhance its revenue generation capabilities.

Tenaris SA Financial Statement Overview

Summary

Tenaris SA exhibits a well-rounded financial profile with strong profitability margins and a robust balance sheet characterized by low leverage and high equity. While revenue and operating cash flow have declined, the company maintains solid profitability and cash flow generation, ensuring financial resilience.

Income Statement

Positive

Tenaris SA has demonstrated strong profitability with a notable Net Profit Margin of 16.26% in 2024, indicating efficient cost management. However, there was a decrease in revenue from $14.87 billion in 2023 to $12.52 billion in 2024, resulting in a negative revenue growth rate of -15.87%. The EBIT and EBITDA margins are healthy at 19.31% and 25.22% respectively, supporting profitability despite the dip in revenue.

Balance Sheet

Very Positive

The company maintains a strong balance sheet with an excellent Debt-to-Equity Ratio of 0.04, showcasing low leverage. Return on Equity (ROE) is impressive at 12.27%, reflecting effective use of equity capital. The Equity Ratio stands at a robust 81.14%, highlighting significant equity financing and low reliance on debt, which adds to financial stability.

Cash Flow

Positive

Tenaris shows a solid cash flow position with a Free Cash Flow of $2.16 billion in 2024. Although there is a decline in Operating Cash Flow from $4.39 billion in 2023 to $2.87 billion in 2024, the Free Cash Flow to Net Income Ratio remains favorable at 1.06, indicating good cash generation relative to net income. The cash flow stability supports ongoing financial health despite decreased operating cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
12.52B	14.87B	11.76B	6.52B	5.15B
	Gross Profit
4.39B	6.47B	4.67B	1.91B	1.06B
	EBIT
2.42B	4.32B	2.96B	1.32B	101.15M
	EBITDA
3.16B	5.19B	3.82B	1.86B	86.55M
	Net Income Common Stockholders
2.04B	3.92B	2.55B	1.10B	-642.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.05B	3.61B	1.53B	715.98M	1.46B
	Total Assets
20.45B	21.08B	17.55B	14.45B	13.72B
	Total Debt
582.32M	203.96M	840.94M	448.22M	876.35M
	Net Debt
-92.93M	-1.43B	-250.59M	130.09M	291.67M
	Total Liabilities
3.64B	4.05B	3.52B	2.34B	2.27B
	Stockholders Equity
16.59B	16.84B	13.91B	11.96B	11.26B
Cash Flow		Free Cash Flow
2.16B	3.78B	769.87M	-125.52M	1.33B
	Operating Cash Flow
2.87B	4.40B	1.17B	119.08M	1.52B
	Investing Cash Flow
-1.40B	-2.69B	-163.56M	267.90M	-2.09B
	Financing Cash Flow
-2.40B	-1.13B	-178.34M	-647.96M	-375.32M

Tenaris SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price33.26

Price Trends

50DMA

37.11

Negative

100DMA

37.66

Negative

200DMA

34.17

Negative

Market Momentum

MACD

-1.66

Positive

RSI

41.13

Neutral

STOCH

55.44

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TS, the sentiment is Negative. The current price of 33.26 is below the 20-day moving average (MA) of 35.70, below the 50-day MA of 37.11, and below the 200-day MA of 34.17, indicating a bearish trend. The MACD of -1.66 indicates Positive momentum. The RSI at 41.13 is Neutral, neither overbought nor oversold. The STOCH value of 55.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TS.

Tenaris SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BKR	82 Outperform	$37.56B	12.75	18.47%	2.21%	9.10%	55.56%
FTI	78 Outperform	$10.74B	13.35	27.06%	0.78%	16.23%	1403.29%
NOV	78 Outperform	$4.48B	7.38	10.12%	2.49%	3.42%	-35.98%
HLX	73 Outperform	$1.04B	19.20	3.68%	―	5.34%	―
TS	67 Neutral	$19.53B	9.21	12.18%	4.03%	-15.77%	-45.74%
MRC	65 Neutral	$934.01M	36.59	10.01%	―	-9.17%	-71.36%
Sector *	55 Neutral	$7.08B	3.69	-5.71%	6.15%	-1.38%	-53.90%

* Energy Sector Average

Performance Comparison

Tenaris SA

33.26

-3.24

-8.88%

BKR

Baker Hughes Company

38.91

7.06

22.17%

FTI

TechnipFMC

25.54

0.50

2.00%

HLX

Helix Energy

6.84

-3.98

-36.78%

MRC

MRC Global

10.85

-0.94

-7.97%

NOV

12.53

-5.87

-31.90%

Tenaris SA Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -14.45% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook for Tenaris. While the company reported strong financial results, strategic achievements, and investments in efficiency and decarbonization, these were offset by significant challenges such as decreased sales, a tragic accident, and geopolitical uncertainties. The overall sentiment is balanced, reflecting both positive achievements and notable challenges.

Highlights

Strong Financial Results and Shareholder Returns

2024 ended with an EBITDA of $3.1 billion and net income of $2.1 billion on net sales of $12.5 billion. Free cash flow was $2.2 billion, all of which was distributed to shareholders through dividends and share buybacks. The proposed annual dividend per share increased by 38% over the previous year.

Strategic Achievements and Awards

Tenaris strengthened its industry position with significant awards and technological advancements. Notably, ExxonMobil honored Tenaris with the 2024 Supplier of the Year Award, and the company secured contracts for major projects with Shell, BP, and Total.

Middle East Market Expansion

Tenaris secured a major CCS pipeline project in Saudi Arabia and extended a long-term agreement with ADNOC in Abu Dhabi. These achievements demonstrate strong market presence and strategic growth in the Middle East.

Investments in Industrial Efficiency and Decarbonization

Completed investments to improve industrial efficiency, including a new electrical furnace in Argentina, modernization of the US facility, and new installations in Italy. Progress was made towards decarbonization goals, including expanding renewable energy use.

Lowlights

Decrease in Sales and Average Selling Prices

Fourth quarter sales reached $2.8 billion, down 17% compared to the previous year and 2% sequentially. Average selling prices in the tubes segment decreased by 7% year-over-year and 1% sequentially.

Tragic Accident in Argentina

An accident at the main plant in Argentina resulted in the loss of two employees' lives, highlighting safety challenges and impacting the company's commitment to safety.

Challenges in Mexico

Sales in Mexico were affected by a steep decline in drilling activity, largely due to Pemex's financial difficulties. Tenaris reduced its credit exposure in response to the situation.

Uncertain Geopolitical and Market Conditions

The company faces uncertainty due to potential US tariffs and changes in the global trading environment, which could impact market dynamics and pricing.

Company Guidance

During the fourth quarter of 2024, Tenaris reported sales of $2.8 billion, marking a 17% decrease compared to the same period in the previous year and a 2% decline sequentially. This decline was primarily due to reduced volumes and lower average selling prices, especially in North America, although a favorable product mix helped offset these impacts. The company's EBITDA rose by 6% sequentially to $726 million, with an increased EBITDA margin of 25.5%, largely due to the partial reversal of a litigation provision related to the Usiminas acquisition. Excluding this one-off effect, EBITDA fell by 4% sequentially to $659 million, with a margin of 23%. The average selling prices in the tubes operating segment fell by 7% year-over-year and 1% sequentially. Tenaris's cash flow from operations was $492 million, and its net cash position decreased to $3.6 billion due to $299 million in interim dividends, $454 million in share buybacks, and $182 million in capital expenditures. The company proposes an annual dividend of $0.83 per share, which includes the previously paid interim dividend. In 2024, Tenaris achieved an EBITDA of $3.1 billion and net income of $2.1 billion on $12.5 billion in net sales, with free cash flow totaling $2.2 billion, all of which was returned to shareholders through dividends and buybacks.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.