Last Update 09 Dec 25

FUR: Margin Recovery And Backlog Execution Will Drive Future Upside Potential

Analysts have trimmed their price target on Fugro slightly to EUR 10.00, reflecting a more cautious neutral stance as they reassess the balance between modestly improved discount-rate assumptions and tempered expectations for the shares' near term upside.

Analyst Commentary

Analysts highlight a more balanced risk reward profile for Fugro at current levels, with the revised EUR 10.00 price target seen as broadly aligned with updated cash flow and discount rate assumptions.

Bullish Takeaways

Bullish analysts note that the EUR 10.00 price target still embeds confidence in Fugro's ability to execute on its backlog and maintain healthy margins, supporting a fair valuation despite the rating change.
Improved discount rate assumptions suggest that perceived risk around Fugro's long term cash generation has eased, underpinning a more stable equity story.
Continued exposure to energy transition and offshore infrastructure work is viewed as a structural growth driver that can support mid cycle earnings and justify the current target level.
Balance sheet progress and greater visibility on project pipelines are seen as mitigating downside risk, leaving room for potential upside if execution outperforms expectations.

Bearish Takeaways

Bearish analysts argue that most of the medium term recovery story is now reflected in the valuation, limiting further rerating potential beyond the EUR 10.00 target.
Concerns persist around execution risk on complex offshore projects, with any delays or cost overruns likely to weigh quickly on earnings momentum and investor confidence.
Slower than anticipated order intake or a softer macro backdrop could pressure growth assumptions embedded in current models, making the risk reward less compelling.
Some caution that higher for longer financing costs and residual balance sheet sensitivity may cap multiple expansion, justifying a more neutral stance near term.

What's in the News

Fugro N.V. withdraws its full year 2025 financial guidance, citing significant recent market changes, and no longer expects the previously anticipated 20 percent revenue growth or to achieve the prior 8 to 11 percent EBIT margin range (Key Developments).
Management still anticipates a notable improvement in performance in the second half of the year compared to the first half, despite stepping back from earlier growth and margin targets for 2025 (Key Developments).
Fugro N.V. is removed from the Euronext 150 Index, reducing its presence in a key European benchmark followed by institutional investors (Key Developments).

Valuation Changes

Fair Value: Unchanged at €9.80 per share, indicating no material shift in the intrinsic value estimate.
Discount Rate: Edged down slightly from 7.96 percent to 7.91 percent, reflecting a modest reduction in perceived risk.
Revenue Growth: Essentially unchanged at around minus 2.23 percent, suggesting stable expectations for top line trends.
Net Profit Margin: Flat at approximately 6.71 percent, pointing to consistent assumptions on profitability.
Future P/E: Reduced marginally from 10.35x to 10.34x, indicating a very small adjustment in the valuation multiple applied to earnings.

Accelerating demand for renewable energy, climate services, and expanded project backlog is driving recurring revenue and improving resilience against sector volatility.
Adoption of autonomous technologies and disciplined cost controls are set to enhance operational efficiency, drive margin expansion, and support strategic growth flexibility.
Weakness in renewables, volatile infrastructure demand, heavy investment costs, restructuring risks, and a shift to lower-margin projects threaten Fugro's growth, margins, and earnings stability.

Catalysts

About Fugro

Provides geo-data services for the infrastructure, energy, and water industries in Europe, Africa, the Americas, the Asia Pacific, the Middle East, and India.What are the underlying business or industry changes driving this perspective?

The accelerated build-out of renewable energy and offshore wind globally continues to expand Fugro's long-term addressable market, even as the sector recalibrates in the near term; as projects delayed in H1 are now being mobilized and activity recovers, this is expected to drive higher revenue growth and strengthen order backlog in the coming years.
Heightened need for coastline monitoring, climate risk mitigation, and subsea infrastructure security (spurred by rising climate risks and regulatory pressures) is establishing recurring, mission-critical project demand for Fugro's geospatial and geotechnical services, supporting both revenue resilience and longer-term earnings visibility.
Fugro's rapid adoption and rollout of autonomous and remote survey technologies (such as USVs and advanced seabed drills) is poised to structurally improve operational efficiency and vessel utilization rates; this, combined with a comprehensive cost reduction program, should lift net margins and boost earnings as asset downtime decreases and more high-value, lower-cost services are delivered.
Ongoing expansion and diversification of the order backlog-with a shift from volatile wind to include large, multi-year projects in oil & gas, infrastructure, and defense-reduces revenue cyclicality and provides enhanced earnings predictability, supporting a quicker recovery from recent revenue shortfalls.
A disciplined capital expenditure program, vessel investment now largely complete, and ongoing balance sheet strengthening position Fugro to capitalize on industry upturns and pursue strategic growth opportunities without overleveraging; this improved financial flexibility is a catalyst for future net earnings expansion as markets recover.

Fugro Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Fugro's revenue will grow by 2.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 6.3% today to 8.7% in 3 years time.
Analysts expect earnings to reach €198.1 million (and earnings per share of €1.79) by about September 2028, up from €132.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €241.1 million in earnings, and the most bearish expecting €136 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 8.9x on those 2028 earnings, down from 9.6x today. This future PE is lower than the current PE for the GB Construction industry at 13.4x.
Analysts expect the number of shares outstanding to decline by 1.79% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.27%, as per the Simply Wall St company report.

Fugro Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged weakness and recalibration in the offshore wind market, with significant drops in renewables backlog and ongoing uncertainties from changing regulations, high interest rates, and grid connection complexities in key regions like Europe and the U.S., continue to reduce revenue visibility and growth prospects in one of Fugro's largest addressable markets.
Persistent macroeconomic instability, high inflation, and slow infrastructure activity across regions (notably the Middle East, Hong Kong, and Europe-Africa), combined with seasonality, are already causing delays and scope reductions in both land and marine revenues, making earnings and future revenue streams more volatile.
Heavy capital expenditures on vessel conversion and USV fleet expansion, following a front-loaded capex profile and rising net debt (from €96 million to €437 million), introduce financial risk-especially as returns from these investments depend on winning projects in increasingly competitive, and sometimes shrinking, markets, placing future net margins and free cash flow under pressure.
Fugro's ongoing cost reduction program, including significant global layoffs (750 FTE) and renegotiations with suppliers, underscores structural cost and operational challenges, and while intended to stabilize margins, it risks negatively impacting execution capability, increasing restructuring charges, and limiting growth capacity during any market upturns.
The replacement of higher-margin long-term wind contracts with a larger number of shorter-duration oil & gas and infrastructure projects increases risk, given the cyclical nature of oil & gas-and with limited near-term evidence of recovery in wind or sustained infrastructure growth, this shift may put pressure on margins and expose the company to sectoral downturns, reducing overall earnings resilience.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €13.667 for Fugro based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €15.0, and the most bearish reporting a price target of just €10.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €2.3 billion, earnings will come to €198.1 million, and it would be trading on a PE ratio of 8.9x, assuming you use a discount rate of 7.3%.
Given the current share price of €11.49, the analyst price target of €13.67 is 15.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Lower Fugro Price Target Amid Mixed Commentary and Guidance Withdrawal