GS starts Vallourec, Tenaris expecting their valuation gap to narrow

Oil Country Tubular

15/12/2025 08:02

** Goldman Sachs initiates pipes makers Vallourec VLLP.PA and Tenaris TENR.MI with "buy" and "neutral", respectively, expecting their valuation gap to narrow

** GS expects lower global oil prices and OCTG drilling activity to be partially offset in 2026 by demand from complex wells and offshore projects, shift towards gas for power, and strong LNG pricing from deepwater and high-pressure wells

** It sees Vallourec as better positioned in 2026, benefiting from full vertical integration in the U.S., while Tenaris faces tariff payments on steel bars and higher reliance on the market

** With Vallourec closing the EBITDA/ton and cash conversion gap with Tenaris, its historical discount vs the peer should narrow to 5%, GS adds

** It sees Vallourec's "robust international order backlog" to drive earnings momentum until the end of 2026-2027

(Reporting by Mathias de Rozario in Gdansk)

((mathias.derozario@tr.com))