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Saipem SpA SPM

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Stock XMIL Rating as of
€1.95 +0.03 (1.43%)
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As of Delayed Price Closed

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Saipem: QatarEnergy Contract Award Causes Us to Lift Our Fair Value Estimate by 12%

Joshua Aguilar

On Sept. 16, The Wall Street Journal reported that no-moat Saipem was awarded a $4 billion contract from QatarEnergy. After incorporating the incremental benefits in Saipem’s offshore engineering and construction segment, where we presume the incremental revenue opportunity will flow through, we lift our fair value estimate by 12% to EUR 2.80 from EUR 2.50. The raise was entirely due to the award, though after taking an additional look at the shares, we increased our country risk premium for the Italy-based oilfield-services company.

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Price vs Fair Value

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SPM is trading at a 515% premium.
Price
€1.95
Fair Value
€3.80
Uncertainty
Very High
1-Star Price
€1.40
5-Star Price
€6.30
Economic Moat
Slzr
Capital Allocation
Vzddcpg

Bulls Say, Bears Say

Bulls

Saipem’s early investment in offshore wind will allow the firm to benefit from the very high growth expectations for offshore wind investment over the next decade.

Bears

Saipem’s fixed-price contracts will continue to pose a high risk, especially as the firm moves to adopt longer-term contracts with customers.

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News

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Trading Information

Previous Close Price
€1.92
Day Range
€1.93–1.97
52-Week Range
€1.25–2.47
Bid/Ask
€1.94 / €1.96
Market Cap
€3.81 Bil
Volume/Avg
30.7 Mil / 28.0 Mil

Key Statistics

Price/Earnings (Normalized)
12.68
Price/Sales
0.32
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
0.87%

Company Profile

Saipem is a conglomerate of oil and gas engineering and construction and drilling services. The company began as the services appendage of oil major Eni, although today Eni as a customer accounts for generally less than 10% of revenue. Saipem is distinguished for leading industry megaprojects like the Nord Stream pipeline carrying large volumes of natural gas from Russia to European markets.
Sector
Energy
Industry
Oil & Gas Equipment & Services
Stock Style Box
Mid Core
Total Number of Employees
30,000
Website
https://www.saipem.com

Competitors

Valuation

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Metric
SPM
FTI
SUBC
Price/Earnings (Normalized)
 12.6898.1363.50
Price/Book Value
 1.593.681.08
Price/Sales
 0.321.360.76
Price/Cash Flow
 4.3814.457.34
Price/Earnings
SPM
FTI
SUBC

Financial Strength

Metric
SPM
FTI
SUBC
Quick Ratio
 0.970.760.94
Current Ratio
 1.101.101.02
Interest Coverage
 2.846.512.98
Quick Ratio
SPM
FTI
SUBC

Profitability

Metric
SPM
FTI
SUBC
Return on Assets (Normalized)
 2.00%4.70%1.23%
Return on Equity (Normalized)
 11.33%14.49%2.26%
Return on Invested Capital (Normalized)
 6.17%9.61%2.64%
Return on Assets
SPM
FTI
SUBC

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