SBM Offshore (ENXTAM:SBMO) Posts Half Year Update And Buyback, Is It Still Below Fair Value?
SBM Offshore (ENXTAM:SBMO) is back in focus after its half year 2026 update, which combined slightly lower sales with higher net income, a fresh interim dividend and completion of a share buyback.
See our latest analysis for SBM Offshore.
The latest half year results, interim dividend announcement and completed €99.88 million share buyback appear to have kept interest in SBM Offshore elevated, with the stock now trading at €35.54 and showing a 12.61% 1 month share price return. That sits alongside a 44% year to date share price return and a 63.06% 1 year total shareholder return, which indicates that momentum has been building over both shorter and longer periods.
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The question now is whether SBM Offshore's strong run reflects investors reassessing the underlying cash generation and contract profile, or whether sentiment around buybacks and dividends has simply pushed the valuation to a new level.
Most Popular Narrative: 20.1% Undervalued
The current SBM Offshore share price of €35.54 sits below the narrative fair value of €44.50, which frames the recent rally as only a partial re-rating.
The valuation case starts with backlog. Converting the US$8.4bn net cash backlog at the current EUR/USD rate produces a backlog value proxy of roughly €7.36bn, or about €42.9 per issued share. That number should not be treated as a clean share price target because the cash arrives over many years and requires execution. I apply a discount for time value, project risk, customer concentration, and the possibility that future offshore sanctioning slows. After those adjustments, my backlog-led fair value is about €40.9 per share. A separate EV/EBITDA check gives a similar answer. Using 2026 EBITDA guidance of about US$1.8bn, SBM trades at around 5.1x EV/EBITDA. A 6.0x multiple, reasonable for a company with long contracted cash flows but still exposed to offshore cyclicality, implies about €38.8 per share. Weighting the backlog model at 80% and the multiple check at 20% gives a base intrinsic value of €40.5.
The key to this SBM Offshore narrative, according to Ivoed, is how long dated backlog, cash conversion and earnings quality feed into that fair value. Curious which revenue and margin assumptions support those cash flow estimates and why they still point to upside against a cautious profit forecast profile.
Result: Fair Value of €44.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, SBM Offshore still faces two clear risks: project execution setbacks on large FPSOs and weaker offshore capex sentiment that keeps the stock on a lower valuation multiple.
Find out about the key risks to this SBM Offshore narrative.
Next Steps
Given this mix of risks and rewards around SBM Offshore, it makes sense to look at the underlying data yourself and decide quickly how you feel about the balance. You can see both sides of the story in one place with the 4 key rewards and 3 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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