Vallourec Shares Dip to €26.19 After a 6-Year High, BNP Targets €31
Vallourec's stock falls by 1.62% to €26.19 in mid-afternoon trading on the SBF 120, following a week that saw a six-year high of €27.67. The stock is digesting a strong rally in a slightly bullish Paris market (+0.24% for the CAC 40). BNP Paribas Exane raised its price target from €21 to €31 this morning, maintaining its outperform rating.
BNP Paribas Exane Raises Target to €31, Reinforcing Upside Potential
On May 18, BNP Paribas Exane increased its price target on Vallourec from €21 to €31, marking an almost 48% increase in the target, while reaffirming its outperform rating. Based on the current price of €26.19, the new target indicates a theoretical appreciation potential of 18.4%. This revision extends a trend initiated by several firms: Morgan Stanley had raised its target to €24 in early May, followed by other increases after the first quarter results were published on May 13. The company then reported a 22.6% margin and a $107 million share buyback. During this announcement, management confirmed its intention to distribute nearly €650 million to shareholders by August, and guided revenue between $175 million and $205 million for the following quarter. Based on consensus, the stock is trading at about 16.4 times the expected earnings for the current fiscal year and 12.4 times those of the next year, compared to an average of 11.6 times for the 'Energy' sector. The expected growth in earnings per share from one year to the next is 32.8%. Analyst opinions remain largely constructive after this quarter.
The Stock Consolidates Just Below Its €27.34 Resistance After a 55% Yearly Rally
Following a gain of nearly 11% over the week and 55% over the year, Vallourec's shares are pausing at €26.19. The price is in the upper part of the Bollinger Bands (78% of the band, upper limit at €27.21) and is approaching the technical resistance identified at €27.34, already tested last week at the week's high of €27.67. The RSI at 65 remains below the overbought threshold, indicating a breather for the stock without a marked exhaustion signal. All moving averages remain positively oriented, with the price 5% above the MM20 and 45.7% above the MM200. On the selling pressure side, net short positions declared reach 8.76% of the capital according to the declarations consulted, a level stable over 30 days. The sectoral context remains supportive for the specialist in seamless oil tubes, with Brent around $111 and a high level of offshore tendering reported during the May 13 announcement. The next key event is the general meeting on May 21.
