Key Takeaways:
- Execution Momentum: Saipem is transitioning from a restructuring phase to steady execution, supported by backlog strength, improving margins, and large-scale offshore and infrastructure project delivery.
- Price Target: Based on our valuation assumptions, Saipem stock could reasonably reach roughly €3 by December 2027.
- Return Profile: This implies a total return of 10% from the current price of €2.43 which translates to roughly 5% annualized returns over the next 2 years.
- Strategic Tension: Ongoing antitrust scrutiny around the Subsea7 merger introduces execution risk, but also highlights Saipem’s scale and strategic importance in global offshore markets.
Saipem SpA (SPM) operates as a global engineering and construction group across offshore energy, onshore infrastructure, and industrial projects, with its earnings closely linked to long-cycle investment activity and large capital programs.
In December 2025, Brazilian antitrust authorities requested additional data on the proposed Subsea7 merger, a review that highlights Saipem’s strategic weight in subsea markets while introducing regulatory uncertainty into its near-term outlook.
Over the last twelve months, Saipem generated about €15 and a half billion in revenue, up from roughly €12 billion two years earlier, showing that backlog conversion is translating into sustained top-line growth.
Trailing EBITDA reached approximately €1.5 billion, reflecting improved project execution and asset utilization after years of margin pressure from legacy contracts and restructuring activity.
The company’s net income from continuing operations totaled about €320 million, marking a clear shift from losses in prior years and confirming that operational improvements are now flowing through to earnings.
With a market capitalization near €4.7 billion, revenue growth is expected to be supported by offshore energy demand, energy transition projects, and large infrastructure awards from national oil companies.
Operating margins have recovered to around 5%, driven by cost discipline and fewer one-off charges, yet the stock still trades near 8x forward earnings, leaving a visible gap between improving fundamentals and market caution.
What the Model Says for SPM Stock
Saipem SpA shows improving execution as revenue reaches €15 billion and margins recover alongside stronger cash generation and backlog visibility.
Assuming 2% annual revenue growth, 6% operating margins, and an 8x exit multiple, the model reflects normalized earnings and limited multiple expansion.
Under these assumptions, the stock could reach roughly €3 by 2027, implying about 10% total return, or roughly 5% annualized from €2.43 today.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for SPM stock:
1. Revenue Growth: 2.3%
Saipem’s revenue expanded from about €12 billion in 2022 to roughly €15 billion on a trailing basis, reflecting backlog conversion rather than short-cycle volume growth.
Recent growth has been driven by large offshore engineering awards and infrastructure projects, where revenue recognition is steady but constrained by project timelines and client approvals.
Forward visibility is supported by a combined backlog exceeding €40 billion when including the proposed Subsea7 merger scope, but execution remains tied to long-cycle capital spending decisions.
At the same time, regulatory reviews and client concentration limit the pace of incremental growth beyond existing awards, keeping upside contained.
According to consensus analyst estimates, a 2% annual revenue growth assumption balances stable backlog execution with the reality of cyclical energy investment and limited near-term acceleration.
2. Operating Margins: 6.1%
Saipem’s operating margin has recovered to around 5% over the last twelve months, a sharp improvement from near breakeven levels earlier in the restructuring phase.
Margin expansion has been supported by better project selection, tighter cost control, and fewer loss-making legacy contracts weighing on results.
Historically, margins in engineering and construction fluctuate with project mix, vessel utilization, and claims resolution, creating a wide range across cycles.
Looking ahead, incremental margin gains depend on disciplined bidding, offshore asset utilization, and avoiding large execution overruns rather than aggressive cost cuts.
Still in line with consensus analyst estimates, a normalized 6% operating margin reflects continued execution progress while remaining conservative given project risk and industry cyclicality.
3. Exit P/E Multiple: 8.2x
Saipem currently trades around 10x forward earnings, an 8x exit multiple assumes limited re-rating until earnings stability is proven across multiple project cycles.
Historically, valuation multiples have remained compressed during recovery phases until earnings stability is sustained across multiple project cycles.
Investor caution is reinforced by regulatory uncertainty around the Subsea7 merger and the company’s past volatility in profitability.
For re-rating to occur, margins and cash generation would need to remain consistent without material project setbacks or balance sheet strain.
Based on street consensus estimates, an 8x exit multiple appropriately reflects improving fundamentals while accounting for execution risk and limited near-term valuation expansion.
What Happens If Things Go Better or Worse?
Saipem SpA outcomes hinge on project execution, margin discipline, and whether valuation remains anchored to a cyclical engineering profile. Here is how Saipem might look in different scenarios through 2027:
- Low Case: If revenue growth stalls 0.3%, and margins slip toward 3.6% → -0.8% annualized return.
- Mid Case: With revenue at 0.3% and margins holding near 3.8% → 3.4% annualized return.
- High Case: If backlog conversion accelerates with margins expand toward around 4% → around 7% annualized return.
Saipem has exited restructuring with clearer earnings visibility, but outcomes remain tightly linked to project delivery and capital discipline across offshore and infrastructure markets.
How Much Upside Does It Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
