Does the Recent Oil Price Rally Make Tenaris Attractive at $15.47 in 2025?

If you have been eyeing Tenaris or already have it in your portfolio, you are probably wondering if now is the moment to make your move or take a breather. With the stock closing at $15.47 recently and showing some upbeat momentum in the past week, up 1.9%, plus a solid 3.4% return over the last month, it is no surprise that investors are talking. Despite some volatility so far this year, as the share price is down 16.1% year-to-date, Tenaris has rewarded long-term holders handsomely, boasting a massive 314.9% gain over five years. The latest uptick in sentiment appears to be driven by ongoing stability in global energy markets, along with a broader investor appetite for industrial stocks. This has helped restore some optimism around core oilfield service providers.

Of course, the heart of the matter is whether the stock looks attractively valued right now. According to our valuation checks, Tenaris earns a strong score of 5 out of 6, signaling the company is undervalued by nearly every measure we track. But what does that actually mean for your decision? Over the next few sections, we will break down the different valuation angles, digging into what makes Tenaris's price tag intriguing today. We will finish by exploring an even smarter way to think about valuation beyond just the numbers.

Why Tenaris is lagging behind its peers

Approach 1: Tenaris Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used valuation method that estimates the present value of a business by extrapolating its expected future cash flows and discounting them back to today's dollars. For Tenaris, this approach starts with the company’s current Free Cash Flow, which stood at $1.99 Billion over the last twelve months. Analysts predict that Tenaris's cash flows will remain robust, projecting $1.51 Billion by 2029. It is worth noting that only the first five years of these projections are sourced from analyst estimates, with subsequent years extrapolated by Simply Wall St.

Taking all of these cash flows and discounting them produces an intrinsic share value of $20.48 using the 2 Stage Free Cash Flow to Equity model. This is above the current share price of $15.47. The DCF estimate implies Tenaris is trading at a 24.5% discount to its fair value, suggesting the market may be undervaluing the company’s future earnings potential.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Tenaris.

Our Discounted Cash Flow (DCF) analysis suggests Tenaris is undervalued by 24.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Tenaris Price vs Earnings

The Price-to-Earnings (PE) ratio is often viewed as the go-to metric for valuing established, profitable companies like Tenaris. It makes sense because it helps investors quickly gauge how much they are paying for each dollar of a company’s earnings, offering an apples-to-apples comparison within an industry.

It is important to remember that what counts as a “normal” or “fair” PE ratio depends on several factors. Higher expected growth and lower risk tend to justify a loftier multiple, while slower growth or higher risk generally means a lower PE is warranted. Context is always key.

Right now, Tenaris trades on a PE ratio of 9.4x, well below the Energy Services industry average of 14.1x and the peer group average of 20.2x. This could initially appear attractive, but raw comparisons may not tell the full story behind the number.

This is where Simply Wall St's proprietary Fair Ratio comes in. Unlike simple averages, the Fair Ratio takes into account Tenaris's specific characteristics, including earnings growth prospects, industry context, profitability, market cap, and risk. For Tenaris, the Fair PE Ratio is calculated at 13.4x, which reflects a more tailored valuation benchmark than industry or peer multiples alone.

Given Tenaris's current PE of 9.4x compared to the Fair Ratio of 13.4x, the stock appears undervalued from this perspective. Investors are paying much less than what would be expected assuming the company's fundamentals and outlook.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Tenaris Narrative

Earlier, we mentioned a better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, powerful way to summarize your personal story about a company by combining your expectations of its future, such as estimated fair value, revenue, earnings, and margins, with your reasoning and outlook on what lies ahead.

Narratives help you connect the company's story to actual financial forecasts and a calculated fair value, making it easier to move from “what you believe” to "what you think it's worth." Available on Simply Wall St’s Community page, which is used by millions of investors, these tools give you an accessible starting point for transparent decision making.

With Narratives, you can see at a glance whether Tenaris looks like a Buy or a Sell by comparing your fair value to the market price. Best of all, Narratives update dynamically whenever fresh news, earnings, or events occur, ensuring your perspective remains relevant and informed.

For example, some investors see Tenaris as set for long-term growth if global infrastructure keeps expanding, reflected in price targets as high as €21.05, while others worry about energy transition risks and model downside to €13.28. Narratives make it easy for you to chart your own path using your personal insights and the latest numbers.

Do you think there's more to the story for Tenaris? Create your own Narrative to let the Community know!

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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