TechnipFMC (FTI): Assessing Valuation After Upbeat Results, Raised Guidance, and Increased Buyback Program

TechnipFMC (NYSE:FTI) just released third quarter results showing an increase in both revenue and net income compared to last year. The company also updated its full-year guidance with higher targets for its core business segments.

See our latest analysis for TechnipFMC.

TechnipFMC’s momentum has been hard to miss this year, with shares surging more than 41% since January and the 12-month total shareholder return reaching an impressive 58%. Confidence seems to be building, fueled by ongoing buybacks, a higher dividend, and the upgraded outlook for its core businesses. Investors appear to be rewarding this mix of growth and shareholder-friendly moves.

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With shares up sharply and guidance moving higher, the big question now is whether TechnipFMC is still trading below its true value or if the recent rally already reflects all of its future growth potential.

Most Popular Narrative: 2.5% Undervalued

TechnipFMC finished the quarter just above its fair value estimate, according to the most widely followed narrative. The last close price was not far off from the revised fair value calculation. This context sets the stage for why some see further upside still embedded in the shares.

Robust and growing pipeline of offshore oil and 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. This supports visibility into sustained revenue growth over the coming years.

Read the complete narrative.

Curious about what earnings growth rates, improving margins, and underlying project wins shape this narrative's bullish fair value? The real engine under this target is a bold forecast for the company's most profitable segments, along with a sharp assumption about future share counts. Want to see how every key variable stacks up in the full narrative?

Result: Fair Value of $42.85 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, it is important to note that TechnipFMC’s heavy reliance on oil and gas projects, along with its exposure to geopolitical risks, could challenge its growth outlook.

Find out about the key risks to this TechnipFMC narrative.

Another View: Looking at the Numbers Through a Different Lens

While the fair value narrative reflects optimism about TechnipFMC’s growth trajectory, a look at its price-to-earnings ratio offers some caution. The shares trade at 17.4 times earnings, making them pricier than both the US Energy Services industry average of 16.5x and the peer group’s 14.6x. The market’s current multiple also sits a little above the estimated fair ratio of 16.9x, which suggests investors are already paying a premium. Does this premium point to future potential, or has the stock simply run ahead of itself?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own TechnipFMC Narrative

If you’d like to question the consensus or want to dive into your own research, it takes just a few minutes to build your own perspective. Do it your way

A great starting point for your TechnipFMC research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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