Last Update 05 Jan 26

Fair value Increased 2.95%

FTI: Future Cash Returns And Subsea Margins Will Support Balanced Upside Risks

Analysts have raised their price target on TechnipFMC from $45.75 to $47.10, citing stronger than expected free cash flow conversion, an improving subsea margin outlook into 2026, and growing confidence that the company can capture more economic value from its offshore project pipeline.

Analyst Commentary

Bullish analysts highlight a constructive backdrop for TechnipFMC, pointing to a combination of stronger free cash flow generation, rising subsea margins, and a more favorable capital return profile as key drivers of recent price target increases.

Bullish Takeaways

Bullish analysts see upgraded models as justified by robust Q3 execution, with expectations that roughly 70% of just over $1.8B in EBITDA will convert to free cash flow, supporting higher equity valuations.
Upside revisions to 2026 Subsea margin guidance, with a midpoint materially above prior consensus, are viewed as evidence that operational improvements can sustain double digit earnings growth beyond the current cycle.
Repeated price target hikes in a short time frame are interpreted as growing confidence that TechnipFMC can structurally improve returns on capital while returning more cash to shareholders.
Bullish analysts argue that the company is increasingly able to capture a greater share of the economic value it creates for customers, which they see as a core driver of multiple expansion and long term growth.

Bearish Takeaways

Bearish analysts caution that the rapid share price outperformance versus sector benchmarks may already discount much of the anticipated margin and cash flow upside, limiting near term rerating potential.
There are concerns that maintaining 20% plus Subsea margins could prove challenging if offshore activity normalizes or competitive intensity increases, introducing execution risk to out year estimates.
Some remain wary that higher shareholder returns, while positive for near term sentiment, could constrain flexibility if the offshore cycle unexpectedly weakens or if larger project awards require incremental investment.
Bearish analysts also point to the dependence on continued improvement in offshore project economics, arguing that any delays or cancellations in the project pipeline could pressure both growth assumptions and valuation multiples.

What's in the News

TechnipFMC secured a substantial iEPCI contract from Eni for the Coral North FLNG development offshore Mozambique, valued between $250 million and $500 million and booked in second quarter 2025 inbound orders (Client Announcements).
The company won a substantial iEPCI contract from Eni for the deepwater Maha project offshore Indonesia, marking Eni's first deployment of TechnipFMC's Subsea 2.0 configure to order technology in the country. This contract is also valued between $250 million and $500 million and recorded in second quarter 2025 orders (Client Announcements).
TechnipFMC received a significant contract from Chevron for Subsea 2.0 production systems on the Gorgon Stage 3 brownfield project. This introduces its first 7 inch series of Subsea 2.0 horizontal trees, with a value between $75 million and $250 million (Client Announcements).
The company was awarded a significant contract by Ithaca Energy for flexible risers, flowlines, and hardware on the Captain field in the U.K. North Sea, extending a long running enhanced oil recovery collaboration. The contract value is between $75 million and $250 million (Client Announcements).
TechnipFMC updated 2025 guidance, targeting Subsea revenue of $8.4 billion to $8.8 billion and Surface Technologies revenue of $1.2 billion to $1.35 billion. The company also expanded its share buyback authorization to $3.8 billion and completed repurchases totaling 14.31% of shares since 2022 (Corporate Guidance, Buyback Tranche Update, Buyback Change in Plan Terms).

Valuation Changes

The fair value estimate has risen slightly from $45.75 to $47.10, reflecting a modestly higher intrinsic equity valuation.
The discount rate is unchanged at 7.14%, indicating a consistent required return in the updated model.
Revenue growth has increased slightly from about 5.01% to 5.04%, signaling a modestly stronger top line outlook.
Net profit margin has risen moderately from roughly 10.87% to 11.19%, indicating an improved long term profitability assumption.
The future P/E has dipped slightly from 16.38x to 16.35x, suggesting a nearly unchanged valuation multiple applied to forward earnings.

Leading position in offshore and subsea markets is strengthened by innovative solutions, strong project pipeline, and high-margin recurring service revenues.
Continued investment in technology, operational efficiency, and portfolio optimization expands margins, supports reliable cash flow, and drives shareholder returns.
Dependence on traditional oil & gas, geopolitical risks, and slow energy transition adaptation threaten future growth, margin stability, and financial predictability amid intensifying competition.

Catalysts

About TechnipFMC

Engages in the energy projects, technologies, systems, and services businesses in Europe, Central Asia, North America, Latin America, the Asia Pacific, Africa, the Middle East, and internationally.What are the underlying business or industry changes driving this perspective?

Robust and growing pipeline of offshore oil & gas and deepwater projects globally, driven by increased capital allocation to longer-cycle offshore developments in regions such as Brazil, Guyana, Mozambique, and Namibia, is underpinning TechnipFMC's record Subsea order intake and high backlog, supporting visibility into sustained revenue growth over the coming years.
Accelerating adoption of integrated EPCI and proprietary Subsea 2.0 solutions-demonstrated by a high percentage of direct awards and customer exclusivity agreements-cements TechnipFMC's differentiated market position, reducing pricing pressure and supporting margin expansion.
Expansion and recurring tail of Subsea services revenues, driven by a growing installed base and long-duration contracts (20–35 years), provide predictable, high-margin income streams that underpin long-term earnings stability and net margin improvement.
Continued investment and leadership in subsea innovation (e.g., all-electric subsea systems, hybrid flexible pipe, and CO2 capture technology) position TechnipFMC to capture value from both conventional oil & gas projects and the rising demand for energy transition infrastructure such as CCS and hydrogen, fostering top-line diversification and future margin upside.
Focused cost discipline, digitalization, and portfolio optimization (e.g., streamlining North American Surface operations, increasing automation) are enhancing operational efficiency and cash generation, manifesting in improved free cash flow and returns to shareholders via buybacks and dividends, positively impacting overall earnings.

TechnipFMC Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming TechnipFMC's revenue will grow by 5.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 9.9% today to 10.6% in 3 years time.
Analysts expect earnings to reach $1.2 billion (and earnings per share of $3.12) by about September 2028, up from $937.5 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.4 billion in earnings, and the most bearish expecting $914 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.9x on those 2028 earnings, down from 17.4x today. This future PE is greater than the current PE for the GB Energy Services industry at 15.0x.
Analysts expect the number of shares outstanding to decline by 3.38% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.65%, as per the Simply Wall St company report.

TechnipFMC Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

TechnipFMC's heavy dependence on Subsea and Surface Technologies tied to oil & gas production leaves it exposed to long-term secular trends toward decarbonization and reduced demand for fossil fuels, which could lead to a shrinking addressable market and declining revenues over time.
The company's significant international exposure, including involvement in geopolitically volatile markets such as Mozambique, Nigeria, and East Africa, increases the risk of project delays, receivable impairments, and margin compression, negatively impacting earnings and financial stability.
Intensifying competition, with new entrants and potential technology breakthroughs in the Middle East Surface market and non-integrated project dynamics in Brazil, could pressure pricing, reduce market share, and squeeze future net margins.
While management touts strong technology leadership and a robust direct award pipeline, a lag in pivoting towards next-generation energy transition projects (e.g., renewables, decarbonization tech) compared to competitors may limit future growth opportunities and lead to lower long-term revenue growth rates.
Prolonged volatility in oil prices may continue to cause delays in major project sanctioning and capex cycles among operators, reducing TechnipFMC's backlog visibility and making revenues and cash flows more unpredictable.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $41.136 for TechnipFMC based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $51.0, and the most bearish reporting a price target of just $30.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $11.3 billion, earnings will come to $1.2 billion, and it would be trading on a PE ratio of 15.9x, assuming you use a discount rate of 7.7%.
Given the current share price of $39.65, the analyst price target of $41.14 is 3.6% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

FTI: Share Buybacks And Improving Margins Will Define Balanced Future Outlook