Saipem (BIT:SPM): Valuation Check After Major QatarEnergy LNG Offshore Compression Contract Win

Saipem (BIT:SPM) just landed a five year EPCI contract from QatarEnergy LNG for the North Field offshore compression project, a deal that meaningfully fattens its order book and underlines its role in large scale energy infrastructure.

See our latest analysis for Saipem.

The contract news drops into a market where Saipem’s share price has already shown improving momentum, with a 1 month share price return of 9.69 percent and a 7 day share price return of 6.48 percent. A 3 year total shareholder return of 141.79 percent points to how strongly the turnaround has played out over time despite a weaker year to date.

If this kind of contract win has you thinking bigger than a single name, it might be a good moment to explore aerospace and defense stocks for other complex engineering and infrastructure plays catching investors’ attention.

With the shares still below analyst targets but already boasting a powerful three year rebound, is Saipem quietly trading at a discount to its next growth phase, or are markets now fully pricing in the recovery story?

Most Popular Narrative Narrative: 19.8% Undervalued

With Saipem last closing at €2.48 against a narrative fair value near €3.09, the gap highlights how strongly future margin gains are being emphasized.

Execution of strategic cost containment and digitalization initiatives has already translated into improving EBITDA margins, now consistently above 11 percent. This signals further upside potential for net margin and cash flow conversion as operational efficiency gains scale. Saipem's capital light fleet strategy and deepening partnerships with supermajors and NOCs are optimizing asset utilization and increasing recurring revenue from long term offshore projects. This is bolstering order intake resilience and long term earnings visibility.

Read the complete narrative.

Curious how flat headline revenues can still justify a higher price tag, stronger margins, and rising earnings power, all discounted at a punchy rate? Read on.

Result: Fair Value of €3.09 (UNDERVALUED)

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

However, lingering legacy project risks and rising lease liabilities could quickly pressure margins and cash flow, challenging the idea that Saipem’s recovery is fully de-risked.

Find out about the key risks to this Saipem narrative.

Build Your Own Saipem Narrative

If you see the evidence differently or want to stress test your own thesis, you can build a personalised narrative in under three 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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