Jefferies initiates a follow-up on Vallourec with a 'buy' recommendation and a price target of 16 euros, a target based on a ratio of 4.2 times 2024 EBITDA and which gives around 60% upside potential for the French tube manufacturer's stock.

'With new management in place and a credible plan to increase FCF by 250 million euros a year alongside progress towards zero net debt by 2025, we see grounds for a re-rating', judges the broker.

The normalization of OCTG prices in the US is the key variable, but Vallourec's 100% seamless tubular products offering and 55% exposure to international prices mitigate the downside potential', he continues.

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