TechnipFMC plc (FTI): what the price requires
At today's price, TechnipFMC plc (FTI) is priced for +28.8% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/FTI
Headline
| Field | Value |
|---|---|
| Ticker | FTI |
| Company | TechnipFMC plc |
| Current price | $73.26/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.0% |
| Operating margin today | 15.2% |
| Margin compression implied | -8.2pp |
| Implied growth | 28.8% |
| Multiple paid | 19x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 11.7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6pp.
Reconcile: at the x-ray's 9.3% required return this reads ~14.5%/yr; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | -0.46σ |
| sustained it ~5 years at this level | 25% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.57x | 5 | expensive |
| Earnings | 1.49x | 2 | expensive |
| Relative | 1.26x | 2 | expensive |
| Growth | — | 0 | — |
Families that call it expensive: Asset
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=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $104.04 | 0.70x | no | FCF base $1.4B, growth 10% (input: historical growth), terminal g 4.0%, WACC 8.9%, 6yr projection |
| DCF Exit Multiple | Growth | $105.36 | 0.70x | no | Exit EV/EBITDA: 13.3x / 15.3x / 17.3x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $59.07 | 1.24x | yes | P/E 20.92x (blended: static sector reference 18x + trailing (TTM) 28x), scenarios: 17.3x / 20.9x / 24.5x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $28.55 | 2.57x | yes | BV/sh $8.20, ROE (TTM) 32.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $55.74 | 1.31x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $81.11 | 0.90x | no | Rev $10.2B, growth 10% (input: historical growth; tapered), Terminal P/S: 2.4x / 2.9x / 3.5x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $91.35 | 0.80x | no | EPS $2.61, growth 35% (input: historical EPS growth), PEG=0.79 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $21.10 | 3.47x | no | Normalized EBIT (5y avg op income, one-time charges added back) $0.87B × (1−27%) / WACC 8.9% → EPV (no growth) |
| Residual Income | Asset | $43.98 | 1.67x | yes | BV $8.20 + 5yr PV of (ROE (TTM) 32.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $21.95 | 3.34x | yes | √(22.5 × EPS $2.61 × BVPS $8.20) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $57.47 | 1.27x | yes | EBITDA $1.99B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $34.76 | 2.11x | yes | FCF $1344.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $84.22 | 0.87x | yes | EPS $2.61 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $7.10 | 10.32x | yes | BV $8.20 × (ROIC 7.7% / WACC 8.9%) |
| P/Sales Sector | Relative | $62.16 | 1.18x | no | Revenue $10.19B × sector P/S 2.5x |
| PEG Fair Value | Relative | $97.88 | 0.75x | no | EPS $2.61 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $28.22 | 2.60x | no | EPS $2.61 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $448.5m |
| Net debt / NOPAT (after-tax) | -0.41x (net cash) |
| Net debt / operating income (pre-tax) | -0.30x (net cash) |
| Interest coverage | 18.6x |
| Share count CAGR (buyback) | -2.4% |
| Burning cash | no |
Bullet Takeaways
- TechnipFMC is the leading subsea engineering and equipment company for offshore oil and gas, and its order book is full, with backlog of $16.5 billion and a stated subsea opportunities list of roughly $30 billion over the next two years.
- The biggest risk is the oil-and-gas cycle: the 10-K is explicit that demand "depends on oil and natural gas industry activity and expenditure levels and the demand for and price of oil and natural gas, none of which the company controls.
- Watch the pace of capital returns, with $264.8 million of buybacks in a single quarter, and whether subsea inbound orders track the $10 billion full-year target that the backlog rests on.
Bull Case
Look at what the price is asking for against what the company is delivering, and the gap is favorable. At $65.14 (June 27, 2026), the inversion of the price requires only about a 6% operating margin, while TechnipFMC actually earns about 15% and is expanding it. The price is not demanding a margin miracle; it is demanding that the company not fall apart, and the recent results point the other way. First-quarter adjusted EBITDA reached $466 million at an 18.7% margin, with the core Subsea segment pushing its margin toward 20%. A business clearing the bar the price sets by a wide margin, while profitability climbs, is the foundation of the bull case.
The order book is the evidence the upcycle has legs. Backlog stood at $16.5 billion, subsea inbound orders were $1.9 billion in the quarter, and management pointed to a subsea opportunities list of roughly $30 billion over the next 24 months, expressing confidence in $10 billion of full-year subsea inbound. Backlog is the closest thing an oilfield-services company has to recurring revenue: it locks in years of work at known prices. The reason TechnipFMC wins this work is its integrated model. The 10-K describes an offering of "innovative technologies and integrated solutions that improve economics through the acceleration of time to first production, enhancing delivery performance, while reducing emissions. By bundling engineering, equipment, and installation into a single contract, the company lowers the total cost and time of an offshore project, which is exactly what oil companies want when they sanction a multi-year development.
The balance sheet and capital returns reinforce the case. TechnipFMC sits in a net cash position of about $448 million with interest coverage above 20 times, a rarity in a sector known for over-leverage, and it is returning cash aggressively. First-quarter free cash flow was $277 million, and total shareholder distributions were $284.7 million, including $264.8 million of buybacks that retired 4.3 million shares. A net-cash subsea leader with a full backlog, expanding margins, and a management team buying back stock with strong free cash flow is the picture the relative-valuation methods are pricing when they land near the current price.
Bear Case
The capital-allocation choice deserves the first hard look, because the timing carries risk. TechnipFMC spent $264.8 million on buybacks in a single quarter, retiring shares at a price near the high end of where the valuation methods land. Buying back stock is shareholder-friendly when shares are cheap, but for a cyclical company doing it at the top of an upcycle, when the stock reflects peak margins and a full backlog, the company risks paying premium prices for its own shares just before the cycle turns. The asset-based methods already read the price as expensive, landing well below the current quote. If subsea spending softens, those buybacks will look like cash deployed at the wrong moment, and a net-cash balance sheet can erode faster than it built.
The deeper issue is that this is an oil-and-gas cyclical, and the price embeds the current activity level continuing. The 10-K is unambiguous that demand "depends on oil and natural gas industry activity and expenditure levels and the demand for and price of oil and natural gas, and that a downturn can lead to "re-scheduling of existing orders in our backlog, which would hit revenue and profitability. The strong 32% return on equity and the near-20% subsea margins are products of a favorable offshore investment cycle, not a permanent feature. Offshore development is among the most capital-intensive and longest-cycle parts of the energy industry, and when oil prices fall, operators defer exactly these multi-year projects first. The backlog provides a buffer, but it is not immune to cancellation or delay.
The valuation reflects little of that cyclical risk. Only the relative-multiple methods reach the price; the asset-based methods sit well below it, and there is essentially no forward-growth method supporting the quote. That pattern says the market is paying a full multiple for current, peak-cycle earnings rather than for durable growth. The price requires the offshore upcycle and the order intake to persist, and the company's confidence in $10 billion of annual subsea inbound is itself a bet on continued high oil-company spending. A subsea leader is a high-quality business, but it is still hostage to the commodity cycle, and buying it at a full multiple while it repurchases its own stock at peak earnings concentrates the downside if the cycle rolls over. The price assumes it does not.
Valuation
The price is reached by the relative-multiple methods while the asset-based methods say expensive, a pattern that for a cyclical company usually means the market is paying a full multiple on peak-cycle earnings. At $65.14, the relative lenses, applying a sector earnings or EV/EBITDA multiple, land near the price, while the methods built from book value of about $8.20 per share sit well below it. There is essentially no forward-growth method reaching the quote, so the price is not built on an extrapolated growth story; it is built on the current earnings power holding.
What the price actually requires is undemanding on margin, which reframes the bet. The inversion shows the price needs only about a 6% operating margin to be supported, against the roughly 15% the company earns now. The market is therefore not betting on margin expansion; it is betting that the offshore activity level, and the order intake that feeds it, persists. The concrete support for that is the backlog of $16.5 billion and the subsea opportunities pipeline of roughly $30 billion over two years, which give multi-year revenue visibility unusual for an oilfield-services name. The honest read is that the static methods see a fully-valued business at peak-cycle profitability, while the durability of the upcycle is the question that determines whether the price is fair. The peer cohort of oilfield-services companies like Baker Hughes and Weatherford is the right comparison, and within it TechnipFMC's subsea leadership commands a justified premium for its integrated model.
Solvency is a clear strength and removes the usual cyclical-downturn risk. TechnipFMC holds net cash of about $448 million with interest coverage above 20 times, so it can ride out a softer cycle without financial distress, and it is generating strong free cash flow. The wrinkle is that management is deploying that strength into heavy buybacks at a full valuation, which is efficient if the cycle holds and a mistake if it does not. The decisive variable is the offshore investment cycle: at today's price the stock is priced for the strong backlog and order intake to continue, and the return on equity near 32% is a peak-cycle figure that the buyer should not assume is permanent.
Catalysts
TechnipFMC reported first-quarter 2026 results in April, with revenue of $2,492.7 million, net income of $260.5 million, or $0.64 per diluted share, beating estimates, and adjusted EBITDA of $466 million at an 18.7% margin. The Subsea segment pushed its margin toward 20%, the core driver of the result. Revenue came in slightly below expectations even as earnings beat, reflecting strong execution on a full order book.
The order metrics are the catalysts that matter most. Subsea inbound orders were $1.9 billion, total company inbound was $2.15 billion, and backlog stood at $16.5 billion. Management reiterated confidence in $10 billion of full-year subsea inbound and highlighted a subsea opportunities list of roughly $30 billion over the next 24 months, while guiding subsea revenue to $9.2 billion to $9.6 billion with a 21% to 22% adjusted EBITDA margin. The pace of order intake against the $10 billion target is the cleanest read on whether the offshore cycle is holding.
Capital returns were substantial: free cash flow of $276.9 million and total shareholder distributions of $284.7 million, including $264.8 million of buybacks that retired 4.3 million shares. The items to watch are the trajectory of subsea inbound orders, the durability of the offshore investment cycle as oil-company spending decisions are made, and whether the aggressive buyback pace continues at current valuations.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- BKR (Baker Hughes Co)
- FY2025 10-K: …Products and services for the remaining IET product lines are primarily sold in a diversified arena to a broad range of customers and across multiple verticals, including aerospace, automotive, pharmaceutical, nuclear, oil and gas, mining, cement, metals, refinery and petrochemical, food and beverage, pulp & paper,…
- FY2025 10-K: …soft market conditions through most of 2026, reflecting customer caution amid oil price uncertainty, with the potential for modest improvement later in the year as excess oil supply begins to moderate. • IET outlook: We see sustained strength in LNG and gas infrastructure, as well as increasing opportunities to…
- WFRD (Weatherford International plc)
- FY2025 10-K: …in line with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin. WCC Results 2025 vs 2024 Twelve Months Ended Variance ($ 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.
Sources
Q1 2026 results, April 2026 · Q1 2026 results release, April 2026