Saipem: Buy or Sell After the Collapse? Understanding Why It’s Not Just About Oil

Saipem: Buy or Sell After the Decline? Here’s Why It’s Not All About Oil

Today’s trading session saw Saipem’s shares plummet by 5.70% on the Milan Stock Exchange, making it the worst performer in the FTSE MIB index.

While this decline is partially attributed to the weak oil prices, it certainly isn’t the sole reason.
Recent rumors regarding increased production from Saudi Arabia along with a rebound in Libyan output have pressured crude oil prices, adversely impacting the entire energy sector.

Nevertheless, the long-term outlook for Saipem remains optimistic, bolstered by significant achievements within the offshore sector.
The company has secured contracts worth a staggering $7 billion within just a few weeks, solidifying its market position.

This growth prompted Kepler Cheuvreux to revise its Saipem price target upwards from €2.50 to €3, indicating a potential upside of 57%.

Short-Term Technical Signals

Caution is warranted, however, due to bearish technical signals that could lead to further price declines in the short term.
The challenges ahead, such as projects in Mozambique and Thailand, do not overshadow the potential within the Engineering and Construction (E&C) offshore segment.
Forecasts predict a robust order growth trajectory extending until 2027, which is expected to positively influence financial results.

Investment Considerations

For investors, the decision to buy, sell or hold shares hinges on their investment horizon.
In the short run, oil market instability might induce volatility, whereas in the long-term, Saipem’s strong business fundamentals could present enticing growth prospects.

Turbo Certificates from UniCredit

Following the market decline on September 26, Saipem has struggled to break through resistance around €2.10.
The risk of further declines towards €1.55 is heightened, targeting the double top established between April and July at €2.47, compounded by the break of the June lows at €2.
Only maintaining the latter reference could prevent a further drop.

For those looking to go long on Saipem, utilizing a Turbo Open End certificate from UniCredit with ISIN DE000HD8QZ80 could be a viable strategy, with the barrier currently set 11.27% away.

Conversely, for short positions, a Turbo Open End Short certificate from UniCredit (ISIN DE000HD8QZ80) is recommended, featuring a barrier 14.52% away.

It is essential to note that these barriers act like automatic stop-loss points; reaching them will trigger an automatic closure of the position.
Turbo Open End certificates from UniCredit also eliminate time limits on investments but do not alleviate the compounding effect common in other financial instruments.
It’s crucial to establish a stop-loss based on individual risk tolerance and sound money management principles.

Discover all Turbo certificates from UniCredit.