Saipem (SPMI.MI): 2Q Preview and Room to Run on Offshore Margins

Research evidence excerpt

Saipem (SPMI.MI): 2Q Preview and Room to Run on Offshore Margins

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29 Jun 2026 11:42:41 ET │ 13 pages

Saipem (SPMI.MI)

2Q Preview and Room to Run on Offshore Margins

CITI’S TAKE

We update our model ahead of 2Q results on 27th July. 2Q order intake

Buy / High Risk has shown a healthy sequential uptick, supported by continued

Price (29 Jun 26 13:59) €4.30 commercial activity in the Middle East, among other regions. Logistically,

while there has been some successful inbound and outbound transits Target price €5.10

through the Strait of Hormuz, some pieces of critical equipment are still Expected share price return 18.6%

required to arrive in Qatar in the coming weeks, posing a near-term Expected dividend yield 4.0%

execution risk if further delays materialise. Recent Brazil antitrust Expected total return 22.6%

approval is supportive of the merger progress. On our estimates, pro forma Market Cap €8,581M

Saipem–Subsea7 trades at a material (>60%) discount to US peer Technip

US$9,767M FMC (wider than that observed between European IOCs and US peers) –

which we see as increasingly difficult to justify given improving earnings

quality and visibility, leaving scope for multiple compression.

Kate O’SullivanAC

Model updates — We revise our ’27-30E Asset Based Services margins higher to +44-20-7986-5704

reflect our expectation that the offshore cycle remains in the mid-upcycle and kate.osullivan@citi.com

continue to expect margin accretion (note, 13 May), we are 8% above Asset Based

Alastair R SymeServices EBITDA in 2028 driven by margins. We revise down our offshore drilling

earnings to adjust for the divestment of the shallow water drilling business (note, 24 Oliver G Connor

June), expected close 3Q26E. Net of these adjustments we revise up 2026-30E EPS

on average 6%.