Vallourec S.A. (VK.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, and internationally.It operates through Seamless Tubes and Specialty Products segments.The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; casings; tubings; VAM connections; rigid subsea line pipes, onshore rigid line pipes, and specialized tubes for transportation of oil and gas; and carbon steel and steel alloy tubes, hollow bars, and connections for the processing of industrial fluids, and oil and gas.

Its oil and gas market services include assistance in lowering tubes, inspecting connections, and supervising assembly; repair services for its products and thread tubes inventory management, advisory, and training services; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; integrated solutions for the subsea line pipe market comprising welding, coating, insulation, logistics, and service agreements; tube coating and welding services.The company's power generation market products and services comprise seamless tubes for steam generators.Its industrial market products and services include tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections; tubular solutions for infrastructure construction; tubes and rings to manufacture cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and tubes and axles for automotive manufacturers.

The company is also involved in the iron ore production business; and various projects concerning renewable energies.Vallourec S.A. was founded in 1899 and is headquartered in Boulogne-Billancourt, France.

Show Full description

1.b. Last Insights on VK

Vallourec's recent performance has been driven by several positive factors. The company secured a contract with BP Berau Ltd. to supply premium Corrosion Resistant Alloy pipes and VAM connections for the Tangguh offshore carbon capture and storage project in Indonesia. Additionally, Vallourec's share buyback program, initiated in January 2026, has continued, with the company purchasing its own shares on several occasions. The program aims to return at least €500 million to shareholders by August 2026. Furthermore, analysts have adjusted their price target for Vallourec to €20.00, reflecting a more balanced view of risk and reward.

1.c. Company Highlights

Last Price	21.57
Change Percentage	-0.83%
Open	21.62
Previous Close	21.75
Market Cap ( Millions)	5052
Volume	1245891
Year High	21.75
Year Low	13.55
M A 50	19.14
M A 200	16.78

FCF Yield	8.38%
Dividend Yield	6.95%
ROE	21.20%
Debt / Equity	41.80%
Net Debt / EBIDTA	-0.10%
Price To Book	2.19
Price Earnings Ratio	10.33
Price To FCF	11.93
Price To sales	1.07
EV / EBITDA	5.15

2. Vallourec's Strong 2025 Performance and Promising 2026 Outlook

Vallourec's financial performance in 2025 was impressive, with revenues of EUR 4.23 billion and an EBITDA margin of 21%. The company's net income was EUR 355 million, with earnings per share (EPS) of EUR 0.908, significantly beating analyst estimates of EUR 0.35. The company's cash generation was also robust, with total cash flow of over EUR 400 million for the third consecutive year. In Q4 2025, revenues were EUR 1.043 billion, down 2% year-over-year but up 4% at constant foreign exchange rates, with an EBITDA margin of 20.5%.

Publication Date: Mar -01

                                    📋 Highlights
                                    Strong Cash Generation::
                                                Vallourec generated over EUR 400 million in total cash for the third consecutive year in 2025, with EBITDA of EUR 819 million (21% margin) and net income of EUR 355 million.
Significant Shareholder Returns::
                                                The company plans to return EUR 650 million to shareholders in 2026 via a EUR 450 million dividend and EUR 200 million share buyback, covering 90% of 2025 cash generation.
Q4 Performance Resilience::
                                                Q4 2025 EBITDA reached EUR 214 million (20.5% margin), with revenues of EUR 1.043 billion, up 4% at constant FX, despite a 2% YoY decline in nominal terms.
Mine and Forest Outperformance::
                                                The segment sold 1.5 million tonnes, exceeding expectations, and achieved EUR 38 million EBITDA (48% of revenue), highlighting strong operational efficiency.
Strategic Geothermal Partnership::
                                                Vallourec secured an exclusive partnership with XGS Energy to advance geothermal projects, targeting EUR 1.5 billion in potential revenue and 10–15% EBITDA contribution from new energy markets.

                                

Operational Excellence and Strategic Progress

Vallourec made significant progress on its strategic priorities in 2025, including operational excellence, optimizing its asset base, and positioning for profitable growth. The company invested in high-return projects, such as expanding its iron ore production capacity in Brazil and reconfiguring its steelmaking assets. The company's Tubes segment saw a revenue mix with a reduction in North America contribution and a strong contribution from the Middle East, with EBITDA per tonne at EUR 548, up EUR 37 per tonne year-over-year.

Growth Opportunities and Outlook

Vallourec is well-positioned in the geothermal market, with an exclusive partnership with XGS Energy to support the delivery of commercial advanced geothermal projects. The company sees growth potential in new energy applications, including geothermal, and expects these to contribute significantly to its EBITDA. For 2026, the company expects North America tubes business to see sustained strength in volume and a slight near-term decrease in U.S. market prices. Vallourec targets a substantial EUR 650 million in shareholder returns in the first 8 months of 2026, with a dividend yield of 7.59%.

Valuation and Return Metrics

With a P/E Ratio of 9.47 and an EV/EBITDA of 4.72, Vallourec's valuation appears reasonable. The company's ROE is 21.2%, indicating strong profitability. The company's net cash position and robust cash generation support its shareholder returns and investment plans. Analysts estimate next year's revenue growth at 1.6%, suggesting a stable outlook.

Future Prospects and Risks

Vallourec's first quarter EBITDA is expected to range between EUR 165 million and EUR 195 million, with tubes EBITDA per tonne expected to remain stable sequentially. The company's Mine and Forest production sold is expected to be around 1.4 million tonnes in Q1 and 5.5 million tonnes for the full year. The company's focus on operational excellence and asset streamlining is expected to drive continued improvement in EBITDA per tonne.

3. NewsRoom

VALLOUREC : DISCLOSURE OF TRADING IN OWN SHARES FROM 03/23/2026 TO 03/24/2026

Mar -30

Source:

How Vallourec (ENXTPA:VK) Is Seeing Its Investment Story Rewritten By A Subtle Valuation Shift

Mar -28

Source:

VALLOUREC : AVAILABILITY OF THE 2025 UNIVERSAL REGISTRATION DOCUMENT

Mar -26

Source:

VALLOUREC WINS FIVE CONTRACTS FOR OCTG PRODUCTS IN INDONESIA

Mar -25

Source:

VALLOUREC : DISCLOSURE OF TRADING IN OWN SHARES FROM 03/16/2026 TO 03/20/2026

Mar -23

Source:

VALLOUREC TO SHOWCASE THE LATEST INNOVATIONS IN ITS VAM® CONNECTIONS AND COMPREHENSIVE SERVICE OFFERINGS AT OTC ASIA 2026

Mar -20

Source:

Assessing Vallourec (ENXTPA:VK) Valuation After New Tangguh CCS Contract Win

Mar -19

Source:

VALLOUREC SECURES A CARBON STORAGE CONTRACT WITH BP BERAU LTD. FOR THE FIRST OFFSHORE INJECTION WELLS IN PAPUA, INDONESIA

Mar -18

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Tubes

Expected Growth: 4.65%

Vallourec S.A.'s tubes segment growth of 4.65% is driven by increasing demand from the oil and gas industry, particularly in the US and Middle East. Rising energy consumption and infrastructure development also contribute to growth. Additionally, Vallourec's focus on premium and high-value products, such as OCTG and line pipes, supports revenue expansion.

Mine and Forests

Expected Growth: 4.65%

Vallourec S.A.'s Mine and Forests segment growth of 4.65% is driven by increasing global demand for steel tubes in mining and forestry applications, coupled with the company's strategic expansion into emerging markets, investments in innovative products, and operational efficiency improvements.

Inter-segment Transactions

Expected Growth: 4.83%

Vallourec S.A.'s 4.83% inter-segment transaction growth is driven by increasing demand for premium tubes in the oil and gas sector, coupled with the company's strategic expansion into high-margin markets. Additionally, the company's focus on operational efficiency and cost reduction initiatives have contributed to the growth.

Holding Companies and Other

Expected Growth: 4.5%

Vallourec S.A.'s 4.5% growth in Holding Companies and Other segment is driven by strategic investments in digital transformation, cost savings initiatives, and a focus on high-margin businesses. Additionally, the company's diversified portfolio and strong cash flow generation have enabled it to invest in growth opportunities, further contributing to its growth momentum.

7. Detailed Products

Seamless Tubes

Vallourec S.A. offers a wide range of seamless tubes for various industries, including oil and gas, power generation, and construction.

Welded Tubes

Vallourec S.A. provides high-quality welded tubes for applications such as oil and gas, automotive, and construction.

Premium Connections

Vallourec S.A. offers premium connections for the oil and gas industry, ensuring high-performance and reliability.

Line Pipes

Vallourec S.A. supplies line pipes for the transportation of oil and gas, meeting the highest standards of quality and safety.

Tubular Solutions

Vallourec S.A. provides tubular solutions for the oil and gas industry, including casing and tubing, drill pipes, and production tubing.

Project Management

Vallourec S.A. offers project management services for the oil and gas industry, ensuring efficient and timely project execution.

8. Vallourec S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Vallourec S.A. is medium due to the availability of alternative products and services in the steel tube industry.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of large customers in the industry, giving them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers in the market, reducing their negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the steel tube industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the industry, with multiple players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	40.81%
Debt Cost	12.49%
Equity Weight	59.19%
Equity Cost	15.97%
WACC	14.55%
Leverage	68.95%

11. Quality Control: Vallourec S.A. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Kemira

A-Score: 6.3/10

Value: 6.4

Growth: 6.0

Quality: 5.8

Yield: 6.9

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

SSAB

A-Score: 6.2/10

Value: 7.8

Growth: 5.8

Quality: 4.5

Yield: 8.1

Momentum: 7.5

Volatility: 3.3

1-Year Total Return ->

Acerinox

A-Score: 5.9/10

Value: 5.3

Growth: 4.4

Quality: 3.0

Yield: 8.1

Momentum: 7.5

Volatility: 7.0

1-Year Total Return ->

Vallourec

A-Score: 5.4/10

Value: 7.3

Growth: 3.8

Quality: 6.6

Yield: 5.0

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

Voestalpine

A-Score: 4.8/10

Value: 6.1

Growth: 1.3

Quality: 3.2

Yield: 4.4

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

CMC

A-Score: 4.2/10

Value: 3.6

Growth: 3.8

Quality: 4.5

Yield: 2.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.85%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

14.55%

Vallourec S.A. - FR0013506730

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on VK

1.c. Company Highlights

Lower Yield

Strong Momentum

Better Quality

Earnings Miss

Revenues Beats

Cheaper

Earnings Beats

Fairly Valued

Lower Growth

Stable Momentum

Average Quality

Average Growth

Medium Volatility

Revenues Miss

2. Vallourec's Strong 2025 Performance and Promising 2026 Outlook

Operational Excellence and Strategic Progress

Growth Opportunities and Outlook

Valuation and Return Metrics

Future Prospects and Risks

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Tubes

Expected Growth: 4.65%

Mine and Forests

Expected Growth: 4.65%

Inter-segment Transactions

Expected Growth: 4.83%

Holding Companies and Other

Expected Growth: 4.5%

7. Detailed Products

Seamless Tubes

Welded Tubes

Premium Connections

Line Pipes

Tubular Solutions

Project Management

8. Vallourec S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Vallourec S.A. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.57$

Current Price

21.57$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA