Last Update 09 Dec 25

Fair value Increased 0.72%

TE: Energy Transition Contracts Will Drive Future Upside In Share Price

Analysts have nudged their fair value estimate for Technip Energies slightly higher, to approximately EUR 43 from about EUR 42.70, citing a blend of modestly stronger long term revenue growth expectations and higher future valuation multiples, despite mixed recent price target revisions across the Street.

Analyst Commentary

Sell side sentiment on Technip Energies remains constructive overall, with a mix of target price increases and trims that net out to a slightly higher implied fair value. Bullish analysts highlight improving growth prospects and execution in key end markets, while more cautious voices focus on valuation normalisation and project risk after a strong share price run.

Recent price target changes span the mid 30s to EUR 50 range, underlining differing views on how much of the companys medium term growth and margin expansion potential is already reflected in the stock.

Bullish Takeaways

Bullish analysts lifting targets into the mid 40s to EUR 50 point to a healthier long term revenue growth profile, supported by a solid backlog and exposure to energy transition projects.
Higher targets from large banks such as JPMorgan signal confidence that execution on complex projects can sustain margin improvement, justifying premium valuation multiples versus historical averages.
Upgrades to Buy with targets above the new fair value estimate suggest scope for further upside if Technip Energies continues to convert its pipeline into high quality, profitable contracts.
Target hikes from the low 30s into the mid 30s and low 40s indicate that prior expectations were too conservative on earnings power, as analysts recalibrate models to stronger order intake and cost discipline.

Bearish Takeaways

Bearish analysts trimming targets in the mid 30s to low 40s reflect concerns that the valuation is approaching full, leaving a narrower margin of safety if project execution stumbles.
Neutral or Equal Weight ratings, despite higher absolute price targets, highlight lingering caution around lump sum contract risk and potential cost overruns in a still volatile macro backdrop.
Downgrades to more neutral stances, even with reasonable upside to targets, suggest that near term catalysts may be limited after a period of strong performance, tempering expectations for multiple expansion.
The spread between the lowest and highest targets underscores uncertainty around the durability of current growth, with more conservative models assuming a slower normalisation of order momentum and margins.

What's in the News

Fearnley upgraded Technip Energies to Buy from Hold, setting a EUR 46 price target, reflecting increased confidence in earnings growth and valuation support (Periodical).
Technip Energies Loading Systems won a contract to supply three fully electric marine loading arms for phase 2 of the Northern Lights CO2 transport and storage project in Oygarden, Norway. This is a first of its kind that removes hydraulics and aims to set a new benchmark in safety and environmental performance (Key Developments).
The Northern Lights phase 2 contract builds on Technip Energies prior delivery of the world's first liquefied CO2 marine loading arms for phase 1, with terminal capacity targeted to exceed 5 million tonnes of CO2 per year by 2028 (Key Developments).
Technip Energies secured two engineering services contracts from Repsol for the Ecoplanta waste to methanol project in Spain, which will convert up to 400,000 tons of residual municipal waste annually into around 240,000 tons of renewable methanol using Enerkem gasification technology (Key Developments).
Technip Energies was added to the CAC Next20 Index, increasing its visibility among institutional investors and signaling its growing stature in the French equity market (Key Developments).

Valuation Changes

Fair Value Estimate rose slightly to approximately €43.0 from about €42.7, reflecting modestly stronger growth assumptions and higher valuation multiples.
The discount rate edged up marginally to around 6.57 percent from roughly 6.53 percent, indicating a slightly higher required return in the updated model.
Revenue growth increased modestly to about 8.42 percent from approximately 8.23 percent, signaling a small upgrade to long term top line expectations.
Net profit margin eased to roughly 6.30 percent from around 6.72 percent, implying a somewhat more conservative view on future profitability.
Future P/E rose meaningfully to about 16.9x from roughly 15.2x, suggesting the market may support a higher earnings multiple for Technip Energies over time.

Rising demand for decarbonization and LNG projects, along with geographic and market diversification, supports sustained growth and greater revenue stability.
Strategic partnerships, proprietary technology, and TPS segment expansion are driving margin improvement and higher-quality, recurring earnings.
Heavy reliance on LNG and hydrocarbons, project timing risks, shrinking margins, fierce competition, and geopolitical pressures threaten Technip Energies' future revenue stability and earnings quality.

Catalysts

About Technip Energies

Operates as an engineering and technology company for the energy transition in Europe, Central Asia, the Asia Pacific, Africa, the Middle East, and the Americas.What are the underlying business or industry changes driving this perspective?

Significant recent growth in decarbonization-related orders (now nearly 40% of total intake and over €5 billion in the last 18 months), combined with global net-zero commitments and increasing government incentives for clean energy infrastructure (like CCUS and blue hydrogen), indicates substantial forward demand that should support backlog expansion and sustained top-line revenue growth.
Continuing leadership and solid execution in LNG projects (with major activity in Qatar, new contracts in Africa, and anticipated awards in the U.S.) positions Technip Energies to disproportionately benefit from the long-term role of natural gas in balancing grid intermittency and rising power demand, particularly in emerging markets, which is likely to drive revenue and earnings growth in coming years.
Strategic partnerships and proprietary technology development (such as the exclusive alliance with Shell for carbon capture and commercialization of low-emission ethylene furnace technology) are enabling market share gains in high-value projects, supporting margin improvement and higher-quality, more resilient earnings.
Geographic and market diversification in the company's order book-with around 70% of new orders from outside the Middle East and increased activity in the Americas, Europe, and Asia-reduces regional dependency risks and increases revenue and earnings stability.
Expansion of the Technology, Products & Services (TPS) segment into consultancy, lifecycle solutions, and high-margin proprietary process technology (demonstrated by upgraded margin guidance and sustained performance) is expected to generate more recurring, higher-margin revenue streams, positively impacting overall company net margins and earnings quality.

Technip Energies Earnings and Revenue Growth

Technip Energies Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Technip Energies's revenue will grow by 7.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.4% today to 6.5% in 3 years time.
Analysts expect earnings to reach €588.5 million (and earnings per share of €3.25) by about September 2028, up from €393.6 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €501.1 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.0x on those 2028 earnings, down from 17.9x today. This future PE is greater than the current PE for the FR Energy Services industry at 9.8x.
Analysts expect the number of shares outstanding to decline by 2.28% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.96%, as per the Simply Wall St company report.

Technip Energies Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Technip Energies' near-term and medium-term revenue is highly levered to LNG and hydrocarbon project activity, as evidenced by strong 1H25 revenue/EBITDA growth driven primarily by existing and new LNG awards; any long-term structural decline in natural gas or hydrocarbons due to the accelerating wave of renewables and global decarbonization efforts could reduce addressable market size, risking revenue and backlog stability.
The company's backlog and performance are increasingly dependent on timely final investment decisions (FIDs) for key LNG and decarbonization projects in the U.S. and abroad; persistent delays, cancellations, or policy reversals (such as U.S. DOE funding changes or Section 45V tax credit uncertainties) may result in deferred revenue recognition and higher project concentration risk, impacting both top-line growth and earnings visibility.
Margin volatility is present, with EBITDA margin contraction at the project delivery level due to a portfolio shift toward early-phase projects with inherently lower profitability-suggesting that as the mix changes or as project awards tilt to newer, competitive markets (like CCUS and blue molecules), margins and earnings may be pressured in the long term as legacy projects wind down faster than new revenues scale up.
Intense competition and increasing commoditization within global EPC markets, especially for LNG and emerging decarbonization projects, risk eroding Technip Energies' profit margins and competitive edge; digital innovation and automation trends may further favor faster-moving or more technology-driven competitors if Technip Energies' own investments do not keep pace, threatening long-run earnings quality.
Geopolitical, regulatory, and foreign exchange (FX) risks remain elevated given Technip Energies' growing geographic diversification beyond the Middle East, with 70% of new orders coming from other regions; adverse FX impacts already contributed to lower reported backlog and could continue to compress reported revenues, while shifting political/regulatory environments (e.g., U.S. energy policy or European incentive structures) may create uncertainty and execution risk, affecting long-term earnings predictability and capital allocation.

Valuation

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

The analysts have a consensus price target of €41.077 for Technip Energies 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 €50.0, and the most bearish reporting a price target of just €33.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €9.1 billion, earnings will come to €588.5 million, and it would be trading on a PE ratio of 14.0x, assuming you use a discount rate of 7.0%.
Given the current share price of €39.88, the analyst price target of €41.08 is 2.9% 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.

Share Momentum Will Accelerate With Diversified LNG And Decarbonization Contracts