Saipem shares dropped sharply on the day after management issued a notable downgrade to the company’s 2026 profitability outlook alongside first-half results. The stock was down 7.1%, trading at €4.05, with an investor conference call held at 10:30 AM CEST intensifying selling pressure during the session.
The group lowered its full-year 2026 adjusted EBITDA target to €1.75 billion, down from a previous estimate of €1.9 billion. That change represents a roughly €150 million reduction versus the earlier outlook and surprised the market given the largely constructive analyst consensus ahead of the results.
Saipem cited two principal factors behind the guidance cut. First, the company incurred approximately €70 million of extra security-related expenditure in the first half of 2026 to protect personnel working in the Gulf region amid the ongoing Middle East crisis. Second, the deconsolidation of its recently divested shallow-water drilling business removed a meaningful earnings contributor from the consolidated group, reducing consolidated EBITDA.
In the same results package the contractor disclosed two new awards from Eni totaling roughly €800 million - one for an offshore project in Ivory Coast and another for an onshore facility in Italy. While these contract wins add to backlog, the positive news did not offset the negative surprise from the earnings revision.
Analyst positioning heading into the report underscored the disappointment. JPMorgan had been positioned with an Overweight rating and a €5.89 price target, and UBS carried a Buy rating; the reduction to 2026 EBITDA therefore represented a clear downside shock relative to street expectations.
Broader market conditions offered limited support. U.S. equities were not providing lift, with the S&P 500 roughly flat and the Nasdaq under pressure. In Milan, sentiment had already been fragile after the FTSE MIB posted a steep decline on July 23, driven by risk aversion linked to Middle East tensions and a notable earnings miss from STMicroelectronics earlier in the week. That prior weakness left local markets vulnerable ahead of Saipem’s update.
The combination of a material guidance cut, heightened geopolitical-related cost pressures and a wider risk-off tone across European markets created the context for today’s pronounced share-price reaction. Despite the stock’s recovery year-to-date from a 52-week low of €2.166, the revised outlook prompted investors to reassess near-term valuation, pulling the share price back from its 52-week high of €4.846.
Investors will be watching how the company converts backlog into earnings and how ongoing security-related costs and the implications of the deconsolidation play out in second-half performance.