TechnipFMC Hits New Heights: Should Investors Jump In?
Oilfield services provider, TechnipFMC plc (FTI) has demonstrated remarkable growth since the start of 2024. The stock closed Thursday at $30.02, having reached a new 52-week high of $30.23 earlier in the day. Consequently, FTI shares are up nearly 50% this year, exceeding the S&P 500. Additionally, TechnipFMC is outperforming rivals such as Oceaneering International (OII) and Core Labs (CLB).
Year-to-Date Performance of FTI, OII, and CLB
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Given this strong performance, potential investors might wonder: is it time to buy TechnipFMC stock, wait for a better opportunity, or take profits? Let’s take a closer look at the company’s fundamentals.
Understanding TechnipFMC
Founded through a merger of Technip and FMC Technologies in January 2017, this UK-based company manufactures and supplies a range of products and services for the energy sector. TechnipFMC focuses on creating and maintaining advanced systems and products for subsea, onshore/offshore, and surface projects.
Solid Fundamentals Supporting FTI Stock
TechnipFMC’s total backlog hit $14.7 million in Q3 2024, marking an 11.1% increase from last year. This growing backlog promises strong revenue visibility and enhances margin potential. The company has raised its 2025 revenue forecast for the Subsea segment—from $8 billion to between $8.3 billion and $8.7 billion—reflecting confidence in continued project execution and demand for Subsea technologies, with expected adjusted EBITDA margins increasing to between 18.5% and 20%.
Recent critical contracts, including deals with Petrobras for flexible pipe and subsea production systems and an iEPCI project with bp for the Kaskida field in the Gulf of Mexico, have strengthened TechnipFMC’s market position in essential growth areas like Brazil and the Gulf.
Moreover, the Subsea 2.0 platform—a suite of innovative products designed to improve project economics—could lead to rapid adoption of environmentally friendly all-electric systems, expanding the company’s growth prospects.
TechnipFMC has also announced a $1 billion increase in its share repurchase authorization, bringing the total to $1.2 billion. This move aligns with a commitment to nearly double shareholder distributions for 2024 compared to the previous year, demonstrating management’s confidence in the company’s strong cash flow and potential for growth.
TechnipFMC: Positive Scores and Analyst Revisions
TechnipFMC boasts a Value and Growth Score of B, contributing to a favorable VGM Score of B. Over the past 60 days, earnings revisions have trended positively, with the Zacks Consensus Estimate for TechnipFMC’s 2024 earnings rising from $1.37 to $1.55 per share while the estimate for the following year increased from $1.90 to $1.96.
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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Should Investors Be Concerned About Rapid Growth?
Over the past three years, TechnipFMC shares have soared by 374%, far surpassing the S&P 500’s 25.5% increase and the Zacks Oil/Energy sector’s 41.4% growth. If the company continues to exceed earnings expectations, as it has for the last four quarters, there may be more upside for the stock.
Conclusion: Consider Buying TechnipFMC
Given the current landscape, investing in TechnipFMC seems sensible. While some advisors caution that the stock may have risen too quickly, the influx of new contracts and a growing backlog suggest solid revenue prospects and improving margins in the future. This reinforces the idea of strong cash flows that could fuel higher stock prices over time.
TechnipFMC currently holds a Zacks Rank of #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
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Core Laboratories Inc. (CLB): Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
