Tenaris S.A. (TS) Price Watch: Next Upside Hurdle to Clear

Tenaris S.A. (NYSE:TS) dropped -3.9% in recent trade and currently has a stock-market value of $13.99B. The shares finished at $23.43, after trading as low as $23.155 earlier in the session. It hit an intraday high Thursday at $23.8. Trading activity significantly improved as the volume at ready counter increased to 3,834,451 shares versus 2,582,085 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,129,242 shares. The stock is now -2.21% above against its bear-market low of $23.96 on December 06, 2018. It has retreated -73.45% since it’s 52-week high of $40.64 reached in May. Now the market price is down -20.82% on the year and down -26.46% YTD.

TS’s 50 day simple moving average (SMA 50) price is $30.02 and its 200-day simple moving average (SMA 200) price is $34.36. The company’s stock currently has a total float of 233M shares. Its weekly volatility is hovering around 2.22% and felt 2.67% volatility in price over a month. On the upside, the share price will test short term resistance at around $23.77. On a downside, the stock is likely to find some support, which begins at $23.12. The failure to get near-term support could push it to $22.82.

Wall Street’s most bullish Tenaris S.A. (NYSE:TS) analysts are predicting the share price to blow past $57 per share during the next 12 months. The current median share price forecast by them is $39.41, suggesting that the stock could increase 68.2% in that time frame. The average price target of $38.78 calls for a nearly 65.51% increase in the stock price.

It had seen a new analyst call from Wolfe Research, which initiated the stock at Peer Perform on October 10. Analysts at BofA/Merrill, shed their negative views on September 25 by lifting it fromUnderperform to Buy. Analysts at Jefferies, made their first call about the stock on August 23, recommending it is Buy. Citigroup analysts came out with bearish views on August 17 when the call was made. They think the stock is now Neutral compared to to their prior call for Buy.

When looking at valuations, Tenaris S.A. (TS) has a pricey P/E of 17.06x as compared to industry average of 12.25x. Moreover, it trades for 13.25 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.18x price/book and 1.96x price/sales. Compared to others, Tenaris S.A. is in a different league with regards to profitability, having net margins of 11.3%. To put some perspective around this, the industry’s average net margin is -26.53%. TS’s ROE is 7%, which is also considerably worse than the industry’s ROE of 7.15%. It’s also very liquid in the near term, with a current ratio of 2.7. The stock has a debt/capital of 0.06.

Shares of Tenaris S.A. (TS) have dropped -16.6% since the company’s last earnings report. Over the past 12 fiscal quarters, Tenaris S.A. (NYSE:TS) has topped consensus earnings estimates in 8 quarters (66%), missed earnings in 2 quarters (16%), whereas at 2 occasion EPS met analyst expectations. TS last reported earnings on October 31, 2018 when it released Sep-18 results that exceeded expectations. The company raked in $0.42 per share, -98.07% change on the same period last year. That was better than consensus for $0.34. Revenue for the recent quarter stood at $1.9 billion, up 46% on last year and above the $1.83 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $1.96 billion to $2.24 billion, which should be compared with $1.64 billion generated last year. EPS is seen in a range of $0.32 to $0.48, against the $0.27 reported a year ago.