TechnipFMC plc (FTI): what the price assumes

In the published model solve dated 2026-Q2, anchored at $79.84, TechnipFMC plc (FTI) is priced for +24.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/FTI

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 11.4% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.

Per-Model Detail (n=17)

Solvency

Bullet Takeaways

• Committed work on the books came to 16.5 billion dollars at the end of March, more than a year and a half of revenue at the current run rate, and it is the one number that decides this company.
• The book is being drawn down faster than it is refilled right now: inbound orders fell 30.3% against the year-ago quarter, and Surface Technologies backlog is 23.3% lower than a year ago.
• June-quarter results land July 30, 2026, and the number to read first is Subsea orders against management's stated target of 10 billion dollars for the full year.

Bull Case

One number decides this company, and it is backlog. Committed work stood at 16.5 billion dollars on March 31, 2026, up 4.1% from a year earlier, against trailing revenue a little over 10 billion dollars. Subsea alone carried 15.8 billion dollars of it, scheduled out as 5.2 billion dollars in the remaining nine months of 2026, 4.7 billion in 2027 and 5.9 billion in 2028 and beyond. Change that number and every other judgment about TechnipFMC changes with it. Nothing else in the business is close in importance.

What makes the backlog more valuable than the same headline would have been a decade ago is what it converts into. Subsea operating profit was 349.0 million dollars in the March quarter on 2,208.4 million dollars of revenue, a 15.8% operating margin, up 300 basis points against the year-ago quarter. That improvement is not a commodity effect. It comes from selling the field development as one integrated contract rather than as a pile of separately tendered equipment, which is the model the 10-K describes plainly: We actively pursue alliances with companies engaged in the subsea development of oil and natural gas to promote our integrated systems for subsea production. Awards arriving this year fit that shape, including the one the latest 10-Q singles out: We were awarded an iEPCI contract for TotalEnergies' GranMorgu project - the first subsea development in Suriname.

The customer base is also less cyclical than the sector's reputation suggests. On the Surface Technologies side, international and Middle East activity made up 65 percent in 2025. These markets are less cyclical, as most activities are undertaken by national oil companies with long-term investment horizons and a lower cost of development. National oil companies spend on production targets set years out, not on last month's crude quote, and that is a different demand curve from a North American pressure-pumping fleet.

Put the peers alongside it and the divergence is the argument. TechnipFMC grew revenue about 9.9% over the trailing period. BKR grew 0.2%, SLB shrank 0.4%, NOV shrank 1.4%, and WFRD shrank 8.8%. On profitability the company runs a trailing operating margin near 15%, ahead of NOV at 4.5% and in line with WFRD at 15.1%, with only the much smaller WHD at 19.5% running higher. An oilfield services group where one name is growing at high single digits while the rest are flat to down is not a group being lifted by a common tide. Something company-specific is happening, and the offshore mix is the obvious candidate.

Cash conversion has followed. Operations produced 332.5 million dollars in the March quarter against 55.6 million dollars of capital spending, leaving free cash flow of 276.9 million dollars, and management guides the full year to a range of 1.3 to 1.45 billion dollars. The commitment attached to it is specific: at least 70 percent of free cash flow returned through dividends and repurchases. In the March quarter that meant 4.3 million shares bought back for 264.8 million dollars plus a 19.9 million dollar dividend. The share count has been falling at roughly 2.4% a year since early 2022, which is the kind of evidence that does not depend on anyone's forecast.

The obvious objection is that orders fell 30.3% against the year-ago quarter, and it is a fair one. Offshore awards are lumpy by construction: a single integrated project can move a quarter by a billion dollars. Management's answer is that its list of identified Subsea opportunities now runs to roughly 30 billion dollars over the next 24 months, a seventh consecutive quarterly increase, and that it still expects 10 billion dollars of Subsea orders for the year. The bull case does not need that target hit exactly. It needs the backlog to stop shrinking.

Bear Case

Management has committed to handing back at least 70 percent of free cash flow, and in the March quarter it handed back 284.7 million dollars, of which 264.8 million bought 4.3 million of its own shares. That is a defensible policy in a business with a long order cycle. It is also a decision to convert the proceeds of a strong point in the offshore cycle into a bet that the offshore cycle stays strong, made at a quote that already embeds a great deal of that outcome. A cyclical company retiring stock near the top of its own cycle has done this before, and shareholders discover the answer years later.

The second governance-adjacent issue lives inside the revenue line. TechnipFMC recognizes most of its revenue over time, on multi-year contracts, using management's own estimates of what those contracts will cost to finish. The 10-K says what that means: the amount of revenue recognized over time is sensitive to changes in our estimates of total contract costs. Those estimates were revised favourably in 2025, and the size of the revision matters. Changes to performance obligations satisfied in earlier periods added 141.7 million dollars in 2025, against 11.1 million dollars in 2024. A near thirteen-fold swing in a discretionary estimate is not fraud and is not unusual in project accounting, but it does mean a meaningful slice of last year's reported improvement came from re-marking old work rather than from new work.

Concentration compounds both problems. Two customers in the Subsea segment accounted for 15.5% and 14.0% of 2025 consolidated revenue. Roughly three dollars in ten came from two counterparties whose capital budgets are set by their own boards and, in one case, by a government. The 10-K is direct about what a slip costs: Our failure to timely deliver our backlog could affect future sales, profitability, and relationships with our customers.

Now set that against what the quote asks for. Backing the market value out into an assumption, the shares embed something like 30.5% annual growth in operating profit sustained over a five-year stage. The rate itself is not fantasy; the company has recently delivered at that pace. The duration is the problem. Of companies that have grown that fast, only about 23% held the pace for roughly five years. Duration, not speed, is what a holder is actually underwriting here, and duration in offshore engineering is set by other people's capital budgets. None of the standard frames reaches the market value either: the earnings-power methods sit under it by a premium of about 56%, the peer-multiple methods by about 31%, and the asset-value approaches land under it as well. If the growth requirement mean-reverts toward the sector, there is no valuation family sitting above the quote to catch it.

The near-term evidence is already pointing the wrong way at the margin. Inbound orders of 2,152.4 million dollars in the March quarter were 30.3% below the year-ago period, book-to-bill came in at 0.9, and Surface Technologies backlog fell 23.3% year over year to 667.6 million dollars. Backlog is a stock, and a stock that is being converted faster than it is replenished eventually falls. Execution is the other tail: the 10-K lists shipyard delays, engineering issues and materials delays among the ways a fixed-scope offshore contract goes wrong, and warns that Failure to complete construction in time, or the inability to complete construction in accordance with design specifications, may result in the loss of revenue. On a book that stretches into 2028 and beyond, several years of cost estimates have to hold.

Valuation

Roughly 30.5% a year, for five years. That is the compounding rate in operating profit the market value embeds once you back it out of a multiple near 20 times company-wide operating income, discounted at 11.7% with 4% terminal growth. Treat it as a direction rather than a measurement: each percentage point of movement in the cost of capital shifts that implied rate by about 6.1 points. What the figure does establish is the shape of the demand, and the shape is unusual. The company has recently grown at that pace, so the rate is not being asked for out of nowhere. The five-year persistence is the stretch. Of comparable fast-growers, roughly 23% held that pace over about five years.

None of the standard frames reaches the market value, which is the more useful fact. The earnings-power methods, which capitalize what the business currently earns without crediting any growth, sit under it by a premium of about 56%. The peer-multiple methods sit under by about 31%. The asset-value approaches land under as well, several of them by a wide margin, because a contractor's book equity is a poor proxy for the earning power of a 15.8 billion dollar order book. Read together the message is not that one method is being stubborn. It is that every backward-looking lens prices the company on work already done, and the quote is priced on work already sold but not yet delivered.

The peer comparison sharpens rather than settles it. Trailing revenue growth of about 9.9% sits against BKR at 0.2%, SLB at negative 0.4%, NOV at negative 1.4% and WFRD at negative 8.8%. The trailing operating margin near 15% runs well ahead of NOV at 4.5% and level with WFRD at 15.1%. So the roughly 31% premium above the peer-multiple methods is buying a company that is, on the evidence, the only one in its cohort growing. Whether that deserves the whole premium is the question the backlog conversion answers over the next two years, not the question a multiple answers today.

Solvency does not constrain any of this. The company reported net cash of 540.4 million dollars at March 31, 2026, against cash and equivalents of 960.8 million dollars. Fold in operating lease obligations, which for a business running vessels and yards are real, and the position turns into a modest net borrowing rather than a burden; on either build, operating profit covers the interest bill roughly 18.6 times over. Management guides full-year free cash flow to 1.3 to 1.45 billion dollars against capital spending of about 340 million dollars. This is not a balance sheet that forces a decision at the wrong moment in the cycle.

Which leaves the exposure exactly where the business puts it. The quote is a claim on the conversion of an order book into profit at margins the company has only recently demonstrated, over a period long enough that the next offshore capital cycle turns at least once inside it.

Catalysts

The March quarter, reported April 30, 2026, was strong on delivery and weak on intake. Revenue rose 11.6% year over year to 2,492.7 million dollars, net income rose 83.5% to 260.5 million dollars, and diluted earnings per share went to $0.64 from $0.33. Subsea carried it: revenue up 14.1% to 2,208.4 million dollars with operating profit up 40.8% to 349.0 million dollars. Against that, inbound orders of 2,152.4 million dollars were 30.3% lower than the year-ago quarter, and backlog closed at 16,468.0 million dollars, up 4.1% on the year but slightly lower sequentially.

Full-year guidance issued February 19, 2026 was left unchanged at the April print: Subsea revenue of 9.2 to 9.6 billion dollars at an adjusted margin of 21% to 22%, Surface Technologies revenue of 1.15 to 1.3 billion dollars at 16.5% to 18%, capital expenditure near 340 million dollars, an effective tax rate of 27% to 31%, and free cash flow of 1.3 to 1.45 billion dollars. Management also restated a target of 10 billion dollars in Subsea orders for 2026 and put its identified opportunity list at roughly 30 billion dollars over the following 24 months.

Order flow since then has been the story. TechnipFMC announced an integrated engineering, procurement, construction and installation award from Var Energi in the North Sea on June 25, 2026, a flexible flowline and riser supply contract from Azule Energy for an Angola development on July 15, 2026, and multiple subsea tie-back awards from Equinor offshore Norway on July 16, 2026. None of those was in the March-quarter intake figure, which is why the June-quarter order number matters more than the revenue line when results are released July 30, 2026. On governance, Eric Mullins, chief executive of a private oil and gas investment firm and a Valero board member, joined the board effective June 1, 2026.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• BKR (Baker Hughes Co)
• FY2025 10-K: …Products and services for the remaining IET product lines are primarily sold in a diversified arena to a broad range of customers and across multiple verticals, including aerospace, automotive, pharmaceutical, nuclear, oil and gas, mining, cement, metals, refinery and petrochemical, food and beverage, pulp & paper,…
• FY2025 10-K: …soft market conditions through most of 2026, reflecting customer caution amid oil price uncertainty, with the potential for modest improvement later in the year as excess oil supply begins to moderate. • IET outlook: We see sustained strength in LNG and gas infrastructure, as well as increasing opportunities to…
• WFRD (Weatherford International plc)
• FY2025 10-K: …in line with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin. WCC Results 2025 vs 2024 Twelve Months Ended Variance ($ in Millions) Dec 31, 2025 Dec 31, 2024 $ % or bps Revenue $ 1,875 $…
• FY2025 10-K: …a number of global and regional competitors. Our principal competitors include SLB, Halliburton, Baker Hughes and Expro Group Holdings. We also compete with various other suppliers who provide products and services within a smaller cross section of our product line portfolio either locally, regionally, or globally.…
• NOV (NOV INC.)
• FY2025 10-K: …completions, and workover activity which drives demand for equipment, spare parts, service, and repair for the segment's large installed base of equipment. The segment also serves marine and offshore markets, where it designs and builds equipment for wind turbine installation and cable lay vessels, and offers heavy…
• FY2025 10-K: …certain contracts for our equipment. As of December 31, 2025, we had a backlog of capital equipment to be manufactured, assembled, tested and delivered by Energy Equipment in the amount of $4.34 billion. The following factors, in addition to others not listed, could reduce our margins on these contracts, adversely…
• WHD (Cactus, Inc.)
• FY2025 10-K: 15% and 10%, respectively, of total Company revenues, with both operating segments reporting revenues with the customer. Competition The markets in which we operate are highly competitive. In the Pressure Control segment, we believe we are one of the largest suppliers of wellheads used in the United States. We compete…
• FY2025 10-K: …obtain new permits or the revocation of current permits could impact our customers' operations and cause a loss of revenue and potentially have a material adverse effect on our business, results of operations and cash flows. Competition within the oilfield services industry may adversely affect our ability to market…
• SLB (SLB LIMITED/NV)
• FY2025 10-K: …Operations and Platforms & Applications. Digital pretax operating margin expanded 557 basis points sequentially to 34%, reflecting improved profitability from strong Digital Exploration activity, robust growth in Digital Operations, and higher Platforms & Applications revenue. Reservoir Performance Reservoir…
• FY2025 10-K: …and the achievement of fully autonomous drilling operations. Digital Digital revenue of $2.4 billion increased 20% year on year driven by the accelerated adoption of digital technologies and higher sales of exploration data. Digital & Integration pretax operating margin of 25% increased 710 bps year on year primarily…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.