FTI: Subsea Margin Gains And Cash Flow Strength Will Offset Market Uncertainty

Analysts have raised their price target for TechnipFMC from $44.95 to $45.75, citing robust quarterly results, increased free cash flow conversion, and strong subsea margin guidance as key drivers that support the company's improved valuation outlook.

Analyst Commentary

Following TechnipFMC's strong quarterly performance and updated outlook, industry analysts have provided fresh perspectives on the company's valuation and growth prospects.

• Bullish analysts have raised price targets, noting the company's demonstrated ability to deliver strong results, particularly in the Subsea segment.
• Updated management guidance projects 2026 Subsea margins between 20.5% and 22%, with the midpoint exceeding consensus estimates. This signals further operating leverage and profitability improvements.
• TechnipFMC's commitment to high free cash flow conversion remains a focal point. Expectations are that around 70% of just over $1.8 billion EBITDA will translate into free cash flow, supporting shareholder returns and strengthening financial flexibility.
• Favorable trends in subsea have reinforced management's confidence in meeting ambitious order intake goals, such as achieving $30 billion in subsea inbound orders over a three-year span. This underpins growth visibility and execution strength.

• Bearish analysts note continued macroeconomic uncertainty, which could create earnings risk relative to sector peers and potentially temper the pace of order growth.
• Execution on longer-term guidance, particularly regarding margin expansion and sustaining high levels of cash generation, remains a key area to watch. Any missteps could impact valuation multiples.
• The subsea market's cyclicality and potential volatility in customer project pipelines may introduce risks to consistent top-line progression and profitability targets.

What's in the News

• TechnipFMC announced completion of its share buyback program initiated in July 2022, repurchasing a total of 61,596,465 shares, representing 14.31% of outstanding shares for $1.45 billion. This includes 6,525,114 shares repurchased from July to September 2025 for $249.98 million (Key Developments).
• The company increased its equity buyback authorization by $2 billion in October 2025, bringing total approved repurchases to $3.8 billion (Key Developments).
• TechnipFMC updated full-year 2025 guidance, projecting Subsea revenue between $8.4 billion and $8.8 billion and Surface Technologies revenue between $1.2 billion and $1.35 billion (Key Developments).
• Awarded a substantial contract by ExxonMobil Guyana Limited for subsea production systems for the Hammerhead development. The contract includes project management, engineering, and subsea architecture based on the Subsea 2.0® platform. It is valued between $250 million and $500 million (Key Developments).
• Secured significant and substantial contracts from Petrobras to supply advanced subsea production systems and flexible risers and flowlines to support multiple greenfield and brownfield developments across Brazil (Key Developments).

Valuation Changes

• Consensus Analyst Price Target has risen slightly from $44.95 to $45.75, reflecting improved valuation outlook.
• Discount Rate has fallen moderately from 7.53% to 7.13%, indicating a lower perceived risk profile.
• Revenue Growth estimates have edged down marginally from 5.08% to 5.01% per year, suggesting stable but slightly tempered future expansion.
• Net Profit Margin projections remain nearly unchanged, decreasing fractionally from 10.88% to 10.87%.
• Future Price-to-Earnings (P/E) ratio has increased from 15.68x to 16.37x, reflecting modestly higher valuation multiples applied to expected earnings.