Stock Analysis & Valuation Duro Felguera, S.A. (0F7F.L)

• Previous Close: £0.18
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	18.30	10010
Intrinsic value (DCF)	11.84	6441
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Duro Felguera, S.A. is a leading Spanish engineering and construction company specializing in turnkey projects for the energy, industrial, and oil & gas sectors. With a rich history dating back to 1858, the company operates globally, providing comprehensive solutions including engineering, procurement, construction (EPC), and maintenance services. Its diversified portfolio spans power generation, mining, LNG storage, biomass plants, and nuclear components, positioning it as a key player in infrastructure development. Headquartered in Gijón, Spain, Duro Felguera serves clients across Europe, Latin America, Africa, and Asia. Despite recent financial challenges, its expertise in complex industrial projects and long-standing industry presence make it a notable entity in the global EPC market. The company’s focus on sustainable energy solutions, such as wind farms and biomass plants, aligns with growing demand for green infrastructure.

Investment Summary

Duro Felguera presents a high-risk investment due to its recent financial struggles, including a net loss of €98.4 million in the latest fiscal year and negative operating cash flow. However, its diversified project portfolio and established reputation in energy and industrial EPC could offer turnaround potential if operational efficiency improves. The company’s exposure to renewable energy and LNG infrastructure aligns with global decarbonization trends, but high debt (€160.6 million) and liquidity constraints remain significant risks. Investors should monitor restructuring efforts and new contract wins in emerging markets for signs of recovery.

Competitive Analysis

Duro Felguera competes in the crowded global EPC market, where scale and financial stability are critical. Its strengths lie in niche expertise (e.g., LNG storage, nuclear components) and a long track record in complex industrial projects. However, the company lags behind larger peers in financial resilience and geographic reach. While its focus on energy transition projects (biomass, wind) is a strategic differentiator, execution risks and reliance on cyclical industries (oil & gas) weaken its competitive edge. The firm’s smaller market cap (~€57.7 million) limits its ability to bid for mega-projects dominated by multinational rivals. Its competitive positioning hinges on leveraging specialized engineering capabilities in high-growth segments like LNG and renewables, but it must address balance sheet weaknesses to capitalize on these opportunities.

Major Competitors

• Técnicas Reunidas (TEC.MC): A larger Spanish EPC firm with stronger financials and a dominant position in oil & gas refining. Técnicas Reunidas outperforms Duro Felguera in international project wins but faces similar cyclical risks. Its expertise in downstream energy infrastructure is a key advantage.
• Sacyr (SDR.MC): Diversified conglomerate with robust construction and concessions business. Sacyr’s financial stability and PPP project experience give it an edge over Duro Felguera, though it lacks the latter’s specialization in industrial EPC.
• Ferrovial (FER.MC): Global infrastructure leader with strong transportation and energy divisions. Ferrovial’s scale and diversified revenue streams reduce exposure to single-sector downturns, unlike Duro Felguera. Its international presence in toll roads and airports is unmatched.
• Fluor Corporation (FLR): US-based EPC giant with superior financial resources and global reach. Fluor’s expertise in energy and mining projects overlaps with Duro Felguera’s, but its larger backlog and balance sheet strength make it a formidable competitor for international contracts.
• Técnicas Reunidas Internacional (T6O.DE): German engineering firm with a focus on industrial plants. While smaller than Fluor, its European base and technical proficiency in chemical and energy sectors pose direct competition to Duro Felguera’s core markets.