On Thursday, Goldman Sachs (NYSE:GS) initiated coverage on TechnipFMC (NYSE:FTI), a provider of technology solutions for the energy industry, with a Buy rating and a price target of $38.00. The investment firm's analyst highlights the company's unique market position and potential for above-peer growth as key reasons for the positive outlook.
According to InvestingPro data, TechnipFMC has demonstrated strong performance with a 67% return over the past year and currently trades near its 52-week high of $32.64. The company has achieved impressive revenue growth of 18% in the last twelve months, reaching $8.8 billion.
TechnipFMC's current offerings and revenue model are expected to support growth surpassing that of its peers. The analyst noted that TechnipFMC, as the sole fully integrated subsea solutions provider, is poised to capitalize on significant market opportunities.
The company's first mover advantage is seen as a critical factor, with around 70% of subsea orders being direct awards, a figure that could increase due to its leading market position. InvestingPro analysis indicates the company maintains a moderate debt level with a debt-to-equity ratio of 0.6, providing financial flexibility for growth initiatives.
Goldman Sachs forecasts an average of approximately 4% growth in subsea orders for TechnipFMC from 2024 to 2027. In comparison to its competitors, the company is projected to have an 8% compound annual growth rate (CAGR) in revenue, while peers are estimated to average around 2% over the same timeframe.
The analyst also expects that TechnipFMC's configured-to-order operating model will contribute to margin expansion as more Subsea 2.0 projects move from backlog to execution. Long-term EBITDA margins of around 21% are anticipated for the company.
The coverage initiation by Goldman Sachs reflects the expectation of positive estimate revisions for TechnipFMC, which are believed to bolster the company's share performance from its current levels. The price target of $38.00 implies a 23% upside from the stock's recent trading price.
Based on InvestingPro analysis, the stock is currently trading at Fair Value, with analysts maintaining a strong buy consensus. Subscribers can access 10 additional ProTips and a comprehensive Pro Research Report, providing deeper insights into TechnipFMC's financial health and growth prospects.
In other recent news, TechnipFMC has been the subject of robust analysis by multiple firms. The company's stock rating has been upgraded from Hold to Buy by Jefferies, reflecting the firm's recognition of TechnipFMC's consistent improvements in operational and commercial delivery. The company's proprietary integrated EPCI (iEPCI™) solution has reached record levels of awards, further bolstering confidence in its growth trajectory.
RBC Capital initiated coverage on TechnipFMC with an Outperform rating, emphasizing the company's ability to convert its substantial backlog into profitable returns. TechnipFMC has also announced plans to double shareholder distributions, demonstrating its commitment to investors.
TD Cowen maintained a positive stance on shares of TechnipFMC, reiterating its Buy rating and a price target of $37.00. The firm highlighted TechnipFMC's leadership in the Subsea production equipment market, noting the company's unique offerings and the significant barriers to entry for competitors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.