Vallourec
Note: This is a daily stock update and the information stands true as of 06/06/25, 09:00 CET.
Company Update:
Expert Opinion:
Hydrogen can be the icing on the oil and gas cake. Vallourec's main equity story relies on oil and gas. But eventually, Hydrogen could be significant especially is it is used as a way to help secure network stability (by adding capacity that can be instantly added to the network if need be). Yet so far, the expected development in Hydrogen has been rather disappointing. But the rest of the equity story remains enticing. The report of oil and gas death were gravely exaggerated, and oil and gas is here to stay for a longer time than expected, meaning more need for OCTGs. Obviously, the current oil price environment isn't really supportive but even in the current environment, Vallourec trades at PE below 10x. Still a buy in our expert's opinion.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
Company Update:
Vallourec announced it will commercialize its hydrogen storage solution known as “Delphy” as it was cleared by authorities and will now be available for sale. It enables to store up to 100 tons of hydrogen, the only solution for mid-size storage solutions.
The casing, tubes and transportation required for geothermal energy or CCUS offer new opportunities, as do hydrogen transportation and storage systems. We believe that the quality of tubes and connections needed not only means very decent prices but also offers a higher barrier to entry than standard steel tubes (higher grades of steel, advanced connections and associated services).
So far, the group has remained conservative on this issue though, targeting about 10% of its EBITDA in FY30 in the field of hydrogen.
Hydrogen can be the icing on the oil and gas cake. Vallourec's main equity story relies on oil and gas. But eventually, Hydrogen could be significant especially is it is used as a way to help secure network stability (by adding capacity that can be instantly added to the network if need be). Yet so far, the expected development in Hydrogen has been rather disappointing. But the rest of the equity story remains enticing. The report of oil and gas death were gravely exaggerated, and oil and gas is here to stay for a longer time than expected, meaning more need for OCTGs. Obviously, the current oil price environment isn't really supportive but even in the current environment, Vallourec trades at PE below 10x. Still a buy in our expert's opinion.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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Alphavalue Morning Market Tip
Estimates adjusted down - Valuation remains too high.
