A Look at Saipem (BIT:SPM) Valuation Following $700m Offshore Contract Win with BP

Saipem (BIT:SPM), together with two SOCAR affiliates, has secured roughly $700 million in offshore contracts from BP for the Shah Deniz Compression Project in the Caspian Sea. The work includes installing a new platform and subsea infrastructure, further establishing Saipem's regional footprint.

See our latest analysis for Saipem.

Saipem’s new offshore contracts mark another significant milestone following a year of active deal-making and steady project announcements. While the share price return has dipped 13.7% year-to-date, investors who’ve stuck with Saipem longer term have seen a robust 24.8% total shareholder return over the past year and a powerful 236% total shareholder return across three years. This highlights momentum in both strategy and market confidence.

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With the stock trading well below analyst price targets despite strong earnings growth, the key question is whether Saipem remains undervalued or if the market has already taken its future growth potential into account.

Most Popular Narrative: 25.7% Undervalued

With Saipem’s fair value estimate set at €3.09 and the last closing price at €2.30, this gap is attracting attention, especially as consensus estimates point to substantial upside potential. The most-followed narrative links robust project demand and operational efficiency to the company's current valuation.

“A record-high, well-diversified order backlog and robust commercial pipeline (€53 billion) provide strong revenue visibility into 2025 and 2026. This positions Saipem to benefit from global energy infrastructure demand driven by population growth, urbanization, and heightened focus on energy security, supporting sustained revenue growth.”

Read the complete narrative.

Curious what projections unlock such a major valuation gap? This narrative banks on margin expansion, renewed engineering strength, and a surge in projects—all key factors steering its bullish outlook. Discover which aggressive targets and hidden assumptions drive analysts’ conviction.

Result: Fair Value of €3.09 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Saipem still faces risks from legacy project costs and increased financial pressure from its asset-light strategy. Both of these factors could impact future margins.

Find out about the key risks to this Saipem narrative.

Build Your Own Saipem Narrative

If you see the numbers differently or want to dig deeper into Saipem’s story, you can quickly create your own perspective and analysis in minutes, your way. Do it your way

A great starting point for your Saipem research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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