Saipem (BIT:SPM): Unpacking the Valuation Story After Recent Share Price Dip

Saipem (BIT:SPM) shares have moved modestly over the past week, catching the attention of investors curious about the company's performance and valuation. With a mixed recent return profile, Saipem presents a case worth examining.

See our latest analysis for Saipem.

Saipem's share price recently dipped to €2.45, down 4% for the day. This comes after a year marked by impressive resilience. While the share price has slipped nearly 8% year-to-date, the company has generated a remarkable 30% total shareholder return over the past twelve months and delivered over a 300% total return in the last three years. This signals underlying momentum even amid short-term volatility.

If Saipem's recent swing has you looking for what else might be gaining traction, it's a great opportunity to expand your search and discover fast growing stocks with high insider ownership

With shares trading nearly 50% below some intrinsic value estimates and a notable gap to analyst targets, the question for investors is clear: is Saipem undervalued, or is future growth already reflected in the price?

Most Popular Narrative: 20.9% Undervalued

The narrative’s fair value for Saipem stands noticeably above the last close at €2.45, highlighting a significant valuation gap. Investors are left contemplating whether the underlying assumptions justify the upside potential displayed in these estimates.

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.

Want to peek behind the curtain at the financial forecasts driving this target? There’s a catch: bold projections in earnings, margins, and market leadership fuel this price. Find out what assumptions give this narrative its edge.

Result: Fair Value of €3.09 (UNDERVALUED)

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

However, the narrative faces risks if legacy project costs recur or if increased leasing expenses put pressure on profits and free cash flow in tighter markets.

Find out about the key risks to this Saipem narrative.

Another View: Closer Look at Earnings Multiples

While discounted cash flow suggests significant upside, the company's current price-to-earnings ratio sits at 14.6 times. This is more expensive than the European Energy Services industry average of 10.1 times, but attractively priced compared to the peer average of 20.9 times and a fair ratio of 16.1. Is this a risk that pays off, or a sign of caution for value-focused investors?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Saipem Narrative

If you think there's more to the story, or if you want to test your own view using the numbers, you can shape your own narrative in just a few minutes: 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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