Company Reports

Following our review of no-moat TechnipFMC, we lift our fair value estimate to $25 from $21, though we remain at the low end of FactSet consensus ranges. Our revised fair value estimate is now roughly in line with TechnipFMC’s stock price, but remains in 3-star territory. We also maintain our no-moat, Standard Capital Allocation, and Very High Uncertainty ratings for this large, pure-play offshore oilfield service provider.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

No-moat TechnipFMC posted revenue and EPS that topped PitchBook estimates by 4% and 39%, respectively. This performance was driven by the Subsea segment, which benefited from a backlog order mix that was more profitable, generating higher margins. The result is that both topline revenue and EBITDA margin for the segment have been guided up for the full year, to $7.7 billion from $7.4 billion and 17% from 16%, respectively. After incorporating these results, we are leaving our fair value estimate unchanged at $21.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

After incorporating TechnipFMC’s full financial and operating results for the first quarter, we’re raising our fair value estimate to $21 per share from $18. We maintain our no-moat rating and Very High Morningstar Uncertainty Rating.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

Technip reported first-quarter results that affirmed the momentum in orders that has been gathering behind it over the last two quarters. We are reaffirming our $18 fair value estimate and no-moat rating.

TechnipFMC wrapped up 2023 with a strong finish in the fourth quarter and is positioned to continue improving performance in 2024. Following the results announcement, we maintain our $18 per share fair value estimate and no-moat rating.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

TechnipFMC continued to deliver solid performance in the third quarter and remains on track to achieve its 2023 targets outlined at the beginning of the year. Revenue increased 4% quarter over quarter and 19% year over year. The firmwide adjusted EBITDA margin expanded by 110 basis points sequentially, reaching 11.5% for the quarter. Elevated offshore oil and gas activity shows no signs of slowing down anytime soon, indicated by a robust global project pipeline extending through at least 2025. Management indicated the firm is on track to deliver full-year results at the high end of guidance, which falls in line with our expectations. We maintain our no-moat rating and $18 fair value estimate following the results.

TechnipFMC posted a very strong second-quarter performance. Revenue increased 15% year over year and quarter over quarter, and the firmwide adjusted EBITDA margin achieved sequential expansion above 100 basis points to nearly 10.5%. High demand for subsea products and services was the driving force behind this quarter's results as offshore oil and gas activity accelerates around the world. We maintain our $18 per share fair value estimate and no-moat rating following results.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

TechnipFMC's first-quarter revenues increased 10% year over year and 1% sequentially, as standard seasonal activity declines offset an otherwise strengthening global offshore market. Brazil and the Gulf of Mexico are currently the most active regions, but opportunities abound all over the world as the offshore industry commences its long-awaited upcycle. The firmwide adjusted EBITDA margin was 9%, up 200 basis points quarter over quarter. We'll incorporate the firm's full operating and financial results shortly, but for now, we maintain our no-moat rating and $18 fair value estimate.

After incorporating 2022 results, we’re raising TechnipFMC’s fair value estimate to $18 per share from $15 as the long-awaited resurgence of offshore activity starts to materialize around the world. We now forecast top-line growth will average about 8.5% per year through 2026, up from our prior estimate of 7% over the same period. We’re also more optimistic about the firm’s long-term profitability potential and expect firmwide operating margins will average about 8.5% per year through 2027, a roughly 150 basis point improvement over our prior forecast. We maintain our no-moat and stable moat trend ratings.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s 2021 spinoff of Technip Energies (representing the firm’s onshore E&C business) transformed TechnipFMC into a pure-play technology and service provider for the offshore market.

TechnipFMC posted a solid fourth quarter, with total revenue up 11% year over year and slightly down 2% sequentially. Adjusted EBITDA margin jumped nearly 200 basis points to 7.1% in the fourth quarter, continuing its steady reversion to prepandemic levels (averaging about 8%) amid strengthening demand for offshore oilfield services. We foresee continued margin expansion over the next several quarters as offshore activity around the world continues to gain momentum. We’ll incorporate the firm’s full financial and operating results shortly, but after this first look, we maintain our $15 fair value estimate. Our no-moat rating and stable moat trend are unchanged following results.

We’re raising our fair value estimate for TechnipFMC to $15 from $14 after incorporating its strong third-quarter results, bolstered by our expectation that the long-awaited uptick in offshore oil and gas production will finally materialize over the next several quarters. Our no-moat rating is unchanged.

TechnipFMC has cultivated a reputation as a top provider for subsea equipment and services, a factor that’s crucial in a space where customers seek solutions for some of the most challenging engineering problems in the world. The firm’s recent spinoff of its Technip Energies sector (representing the firm’s onshore E&C business) has transformed TechnipFMC into a pure-play technology and service provider for the offshore market.