VALLOUREC (Hold, TP E9), We initiate coverage on Vallourec with a Hold rating and a TP of EUR9. 2015 is likely to be a difficult year for Vallourec, as H2 could be worse than H1, which is likely to mean further downward consensus revisions. As a result, the share price is likely to remain under pressure until year-end and Q3 will be a strong catalyst. That said, the company is on track in terms of cost-cutting as laid out in its Valens plan, and it is likely to benefit from other technical effects (end of destocking, forex impact, etc.) next year. We expect revenues and margins to recover from 2016 and especially in 2017-18. We also think the financial structure is sufficient with no short-term need for fresh capital, plus M&A is unlikely.