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Tenaris SA (TS)
NYSE:TS
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Tenaris SA
(NYSE:TS)
Rating:81Outperform
Price Target:
$43.00
▲(12.01%Upside)
Positive Factors
Customer Base
Customer concentration among larger U.S. O&G producers should help insulate volume from oil price fluctuations.
Financial Performance
Higher than modeled cash on the balance sheet drives the DCF based price target from $41 to $43.
Negative Factors
Market Visibility
Mexico remains depressed, and it seems TS has little visibility and their outlook does not reflect.
Pricing and Margins
The pace of benchmark OCTG pricing has slowed which may present some risk to margins.
Tenaris SA (TS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.45B
Dividend Yield5.73%
Average Volume (3M)1.57M
Price to Earnings (P/E)11.7
Beta (1Y)0.74
Revenue Growth-15.28%
EPS Growth-45.42%
CountryUS
Employees25,874
SectorEnergy
Sector Strength53
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.94
Shares Outstanding535,997,440
10 Day Avg. Volume1,748,734
30 Day Avg. Volume1,568,838
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)2.98
Price to Sales (P/S)0.00
P/FCF Ratio53.92
Enterprise Value/Market Cap2.02
Enterprise Value/Revenue0.81
Enterprise Value/Gross Profit10.11
Enterprise Value/Ebitda3.06
Forecast
1Y Price Target
$43.20Price Target Upside12.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Tenaris SA Business Overview & Revenue Model
Company DescriptionTenaris S.A., together with its subsidiaries, produces and sells seamless and welded steel tubular products; and provides related services for the oil and gas industry, and other industrial applications. The company offers steel casings, tubing products, mechanical and structural pipes, cold-drawn pipes, and premium joints and couplings; coiled tubing products for oil and gas drilling and workovers, and subsea pipelines; and umbilical tubing products; and tubular accessories. It also provides sucker rods, industrial equipment, heat exchangers, and utility conduits for buildings, as well as sells energy and raw materials. In addition, it offers financial services. The company operates in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. Tenaris S.A. was incorporated in 2001 and is based in Luxembourg, Luxembourg. Tenaris S.A. is a subsidiary of Techint Holdings S.à r.l.
How the Company Makes MoneyTenaris SA generates revenue primarily through the manufacturing and sale of steel pipe products, which are integral to the oil and gas industry. The company's revenue streams are largely driven by the demand for its seamless and welded tubes used in drilling, completion, and production activities. Additionally, Tenaris benefits from long-term contracts and strategic partnerships with major oil and gas companies, which provide a stable and recurring source of income. The company also offers related services such as pipe coating, bending, and logistics, which enhance its value proposition and contribute to its earnings. Factors such as global oil prices, exploration activities, and infrastructure investments significantly influence Tenaris's revenue, as they directly impact the demand for its products and services.
Tenaris SA Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 19.22%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong performance in Canada and a solid project backlog countered by challenges in pricing, geopolitical uncertainty, and potential slowdowns in North America. Despite these challenges, the company's financial position remains strong with increased cash flow and a solid net cash position.Q1-2025 Updates
Positive Updates
Strong Free Cash Flow
Free cash flow for the quarter was $647 million, supported by a significant reduction in working capital.
Canadian Market Performance
Record quarterly volume of OCTG shipped in Canada, consolidating the Rig Direct strategy with long-term agreements.
Solid Project Backlog
Strong backlog for offshore projects with high-value OCTG, line pipe, and coating products, including recent successes with Shell and BP.
Resilient Performance in the Middle East
Record quarterly level of shipment to ADNOC and commencement of shipments for a major gas processing facility in Algeria.
Increased Net Cash Position
Net cash position increased to $4 billion, up from $3.6 billion at the end of last year.
Negative Updates
Decline in Average Selling Prices
Average selling price in the Tubes segment decreased 11% year-on-year and 5% sequentially due to market and product mix effects.
Challenges in Mexico
Lower sales of OCTG premium products in Mexico, contributing to a decline in average selling prices.
Potential Slowdown in North American Operations
Expected reduction in North American shale drilling activity if oil prices remain low, with potential impacts starting in Q3 2025.
Geopolitical and Macroeconomic Uncertainty
Uncertainty due to geopolitical tensions and macroeconomic conditions, including tariff implications, impacting future activity levels.
Deteriorating Situation with Pemex
Pemex's operational challenges and unsustainable situation impacting Tenaris operations in Mexico.
Company Guidance
During Tenaris's first quarter 2025 earnings call, the company reported a sequential 3% increase in sales, reaching $2.9 billion, although this was a 15% decrease year-on-year. The average selling price in the Tubes segment decreased by 11% compared to the previous year and 5% sequentially. Despite these challenges, EBITDA rose by 6% on a comparable basis, resulting in a slight increase in the EBITDA margin to 24%, attributed to improved operating performance and cost absorption. The company generated an operating cash flow of $821 million, with capital expenditure at $174 million, leading to a free cash flow of $647 million. Following share buybacks amounting to $237 million, Tenaris's net cash position improved to $4 billion, up from $3.6 billion at the end of 2024. The company anticipates maintaining its EBITDA margin between 20% and 25% in the face of potential challenges, such as a slowdown in North American shale drilling and broader macroeconomic uncertainties.Tenaris SA Financial Statement Overview
Summary
Tenaris SA demonstrates strong financial performance with robust profitability, a solid balance sheet with low leverage, and healthy cash flows. The recent decline in revenue growth is a concern, but strong margins and financial ratios indicate efficient operations and a low-risk capital structure.Income Statement
The company's income statement shows strong profitability with a consistent gross profit margin and net profit margin. While there is a noticeable decline in revenue from 2023 to TTM, the company has maintained solid EBIT and EBITDA margins, indicating efficient cost management. The revenue growth has been volatile, with significant growth from 2021 to 2023, but a decline in the TTM period.85
Very Positive
Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio, showcasing low leverage and financial stability. The company has a high equity ratio, indicating a strong capital structure. Return on Equity (ROE) is impressive, reflecting efficient use of shareholder funds to generate profits. The company’s balance sheet suggests strong financial health and low-risk profile.90
Very Positive
Cash Flow
The cash flow statement reveals strong operating cash flows relative to net income, indicating high quality of earnings. Free cash flow growth is positive, although it has slightly decreased in the TTM period compared to 2023. The company exhibits a solid free cash flow to net income ratio, ensuring it can cover operational needs and fund investments.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.00B | 12.52B | 14.87B | 11.76B | 6.52B | 5.15B |
| Gross Profit | 4.08B | 4.39B | 6.47B | 4.67B | 1.91B | 1.06B |
| EBITDA | 2.93B | 3.16B | 5.19B | 3.82B | 1.86B | 86.55M |
| Net Income | 1.81B | 2.04B | 3.92B | 2.55B | 1.10B | -642.42M |
Balance Sheet | ||||||
| Total Assets | 20.62B | 20.45B | 21.08B | 17.55B | 14.45B | 13.72B |
| Cash, Cash Equivalents and Short-Term Investments | 3.35B | 3.05B | 3.61B | 1.53B | 715.98M | 1.46B |
| Total Debt | 497.83M | 582.32M | 203.96M | 840.94M | 448.22M | 876.35M |
| Total Liabilities | 3.22B | 3.64B | 4.05B | 3.52B | 2.34B | 2.27B |
| Stockholders Equity | 17.16B | 16.59B | 16.84B | 13.91B | 11.96B | 11.26B |
Cash Flow | ||||||
| Free Cash Flow | 2.09B | 2.16B | 3.78B | 769.87M | -125.52M | 1.33B |
| Operating Cash Flow | 2.80B | 2.87B | 4.40B | 1.17B | 119.08M | 1.52B |
| Investing Cash Flow | -859.42M | -1.40B | -2.69B | -163.56M | 267.90M | -2.09B |
| Financing Cash Flow | -2.48B | -2.40B | -1.13B | -178.34M | -647.96M | -375.32M |
Tenaris SA Technical Analysis
Positive
38.39
Price Trends
34.34
Positive
35.01
Positive
34.63
Positive
Market Momentum
0.97
Negative
68.90
Neutral
86.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TS, the sentiment is Positive. The current price of 38.39 is above the 20-day moving average (MA) of 36.34, above the 50-day MA of 34.34, and above the 200-day MA of 34.63, indicating a bullish trend. The MACD of 0.97 indicates Negative momentum. The RSI at 68.90 is Neutral, neither overbought nor oversold. The STOCH value of 86.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TS.
Tenaris SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $14.63B | 18.42 | 27.24% | 0.57% | 14.26% | 294.37% | |
81 Outperform | $20.45B | 11.72 | 10.45% | 5.73% | -15.28% | -45.42% | |
74 Outperform | $4.91B | 8.72 | 9.29% | 2.29% | 0.54% | -39.88% | |
71 Outperform | $39.27B | 13.54 | 18.04% | 2.32% | 6.22% | 62.58% | |
71 Outperform | $980.40M | 11.79 | 5.64% | ― | 0.34% | ― | |
68 Neutral | $15.14B | 9.95 | 6.38% | 5.21% | 4.16% | -67.19% | |
67 Neutral | $1.13B | 41.18 | 8.29% | ― | -9.84% | -111.71% |
* Energy Sector Average
Performance Comparison
TS
Tenaris SA
38.39
9.20
31.52%
BKR
Baker Hughes Company
39.64
6.24
18.68%
FTI
TechnipFMC
34.90
8.91
34.28%
HLX
Helix Energy
6.47
-5.48
-45.86%
MRC
MRC Global
13.32
0.78
6.22%
NOV
NOV
13.08
-4.26
-24.57%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.