Técnicas Reunidas has reported positive results for H1 2026: Order Book €13.938M (+7% y/y); Revenues €3.061M (+12%); Underlying EBIT (excluding the provision of -€45M) €149M (24%); EBIT Margin stands at 4.4%; Net Profit €59M; Net Cash: €344M vs €422M Q2 2025.
In Q1 2026, a provision of -€45M was made for costs related to the war in the Middle East. Although hostilities continued during Q2 2026 and there was high volatility in oil prices, it considers that no additional provisions are necessary, which is positive news. Therefore, an increase in the Order Book and Revenues. Profit remains stable.
We maintain our Buy recommendation because:
1.- No projects have been cancelled despite the war. In 2026, it estimates that, in adjusted terms, not taking into account the effect of the provision: Revenues > €6.500M; EBIT > €325M and EBIT margin > 5%.
2.- High volume of activity, which is reflected in its order book. It expects to exceed €8.000M in contracts this year. This level ensures a volume of revenues linked to the execution of these contracts. It has access to a large volume of projects. A significant portion of them are in the Middle East, an area where strong growth is expected in the coming years. However, it also identifies other areas such as Latin America and the United States.
3.- Healthy balance sheet, with a net cash position that, although moderating, remains high, which is important for securing new contracts. We estimate that debt will gradually reduce over the coming years, maintaining a stable treasury volume.
4.- Dividend: dividends are being paid again, with a pay-out of 30% against 2026 results.
5.- Increase in oil and gas prices. The war in the Middle East has created a scenario of lower supply, which will keep prices under pressure. We estimate that the price of Brent crude will close the year at $85 and $80 next year. This improves the margins of the Oil and Gas Industry and is likely to lead to an increase in investments in the sector. For now, this war has negatively impacted the share price of Técnicas Reunidas, as it had to provision €45M in Q1 2026, although it states that no projects have been cancelled and that clients are paying their invoices normally. Additionally, a high price level increases investor appetite for the energy infrastructure sector, which directly benefits from it.
In conclusion, we maintain our recommendation to Buy. Técnicas has in recent quarters increased contracting and maintains positive net cash. That said, the uncertainty in oil and the tensions arising from the war in the Middle East lead us to raise caution and reduce the target price to €33/share from €38.3/share, although the potential remains high, +18%.