UPDATE: Goldman Sachs Downgrades Tenaris S.A. (TS) to Neutral
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Goldman Sachs analyst Sahar Islam downgraded Tenaris S.A. (NYSE: TS) from Buy to Neutral, PT $14.50
The analyst comments "We downgrade Tenaris to a Neutral (from Buy) as the shares now reflect the US onshore recovery in our view. While the US land rig count bottomed in 3Q20 and we expect a recovery through 2021, as mentioned in the tubulars section above, we expect this recovery to be 2H21-weighted. Furthermore, Tenaris shares are now up 18% over the last 6m vs. the rest of the European coverage +2%, so we think the market is no longer overly bearish on US land which was the key reason for our upgrade. We expect Tenaris to continue to generate cash from working capital releases, maintaining the strongest balance sheet within our coverage, but we expect revenue growth to be limited in 1H21 so would need to see a faster recovery in the US land rig count before we got more positive on the name. US pricing is also still close to trough, so it may take some time for pricing power to come back in what has historically been a competitive market."
Shares of Tenaris S.A. closed at $15.61 yesterday.
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