Tenaris (TS, Financial) has unveiled a strategic plan to repurchase up to $1.2 billion of its own shares within the next year. This initiative, aimed at eventually canceling the shares acquired, reflects the company's robust cash flow and healthy financial position. The authorization for this buyback was granted during the annual shareholders' meeting on May 6, 2025, allowing for the purchase of up to 10% of Tenaris's outstanding shares.
Set to commence in June 2025, the buyback program will be facilitated in collaboration with a leading financial institution. This move underscores Tenaris's confidence in its fiscal strength and long-term growth prospects.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Tenaris SA (TS, Financial) is $43.17 with a high estimate of $50.00 and a low estimate of $34.00. The average target implies an upside of 32.37% from the current price of $32.61. More detailed estimate data can be found on the Tenaris SA (TS) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, Tenaris SA's (TS, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Tenaris SA (TS, Financial) in one year is $31.94, suggesting a downside of 2.05% from the current price of $32.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Tenaris SA (TS) Summary page.
TS Key Business Developments
Release Date: May 01, 2025
- Sales: $2.9 billion, down 15% year-on-year, up 3% sequentially.
- Average Selling Price (Tubes Segment): Decreased 11% year-on-year, 5% sequentially.
- EBITDA: Increased 6% on a comparable basis.
- EBITDA Margin: Increased slightly to 24%.
- Operating Cash Flow: $821 million.
- Capital Expenditure: $174 million.
- Free Cash Flow: $647 million.
- Net Cash Position: Increased to $4 billion from $3.6 billion.
- Share Buybacks: $237 million during the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tenaris SA (TS, Financial) reported a sequential increase in sales by 3% due to higher seasonal volumes in Canada and increased onshore sales in the US.
- The company's EBITDA rose by 6% on a comparable basis, with a slight increase in the EBITDA margin to 24%, attributed to good operating performance and better absorption of fixed costs.
- Free cash flow for the quarter was strong at $647 million, supported by operating cash flow of $821 million and capital expenditure of $174 million.
- Tenaris SA (TS) increased its net cash position to $4 billion, up from $3.6 billion at the end of the previous year, despite share buybacks of $237 million.
- The company has a solid project backlog for offshore projects and expects further opportunities with new FID sanctions anticipated in 2026.
Negative Points
- Fourth quarter sales were down 15% year-on-year, with a decline in average selling prices due to market and product mix effects.
- There is uncertainty regarding the macroeconomic and geopolitical situation, which could lead to a slowdown in North American shale drilling activity if oil prices remain low.
- The implementation of US tariffs on steel is expected to impact operating results, with an estimated $70 million per quarter in additional tariff costs.
- The company anticipates a potential reduction in activity levels in the US, particularly in oil production, due to lower oil prices.
- The situation with Pemex in Mexico remains challenging, with a significant reduction in rig operations and production levels, impacting Tenaris SA (TS)'s operations in the region.
