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Tenaris: BarCap initiates coverage with 'buy' rating

(CercleFinance.com) - "Strong player in a challenged market": this is the title of BarCap's research report in which it initiates its coverage of the Tenaris share with an “overweight” rating.

The broker's has a target price of 16.5 euros for this oil pipe specialist, which has Argentine origins. The group operates in the same sector as Vallourec.

However, BarCap is not optimistic about Oil Country Tubular Goods (OCTG), which are the tubes used in oil and gas drilling: "Although gradually recovering, we believe that global OCTG market is facing structural challenges (oversupply, commoditisation) and will not generate past super-cycle economics for everyone," the broker warns in a research report.

However, according to BarCap, "Tenaris is well placed to take advantage of the changing paradigm". The group has "significant potential" in North America, is well positioned to take advantage of renewed demand in Argentina, and generally gains market share of the profitable offshore segment.

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