Vallourec: what’s the point?

(Boursier.com) — Vallourec gains another 1% to 17 euros at the opening of the Paris market this Monday. The news around the manufacturer of seamless tubes is marked by a rating from Jefferies which remains at purchase with an adjusted objective of 18 to 22 euros. TP ICAP Midcap began monitoring the stock with a ‘buy’ rating and a price target of 21 euros. Drastically transformed since 2021 and helped by buoyant markets, Vallourec is on the verge of being completely deleveraged and generating substantial returns for its shareholders. The market does not yet seem to value this healthy cyclical “value” to its proper extent, believes the analyst. Especially since the file includes speculative interest since ArcelorMittal became the group’s largest shareholder in March 2024.

“At the end of the second quarter, we declared that our target capital structure had been achieved, and we are ahead of schedule to achieve zero net debt by the end of 2025. As a result, 80% to 100% of generation of overall cash flow during the third quarter of 2024 and subsequent periods will be distributed to the Group’s shareholders. We will be pleased to announce, during the communication of the 2024 annual results, a dividend proposal to be submitted to the vote of. the 2025 Annual General Meeting”, declared Philippe Guillemot, CEO of Vallourec, during the presentation of the quarterly accounts.

The group is targeting an EBITDA of between 800 and 850 million euros in 2024 with positive overall cash generation in the second half.