👀 Ones to watch: The MOST undervalued shares to buy right nowSee Undervalued Shares

Technip Energies stock downgraded as JPMorgan sees hurdles in new energy strategy

EditorEmilio Ghigini
Published 11/12/2024, 08:58
TE
-

On Wednesday, JPMorgan (NYSE:JPM) issued a downgrade for Technip (EPA:FTI) Energies NV (TE:FP) stock from 'Neutral' to 'Underweight', adjusting the price target to EUR26.00 from a previously unspecified figure. The investment firm expressed increased caution regarding the company's future, particularly in its strategic focus on technology offerings and leadership in New Energies.

The rationale behind the downgrade stems from observations that Technip Energies has struggled to scale its smaller contracts into larger, more lucrative projects. Despite the recent announcement of the BP (NYSE:BP) Net Zero Teesside contract, the firm has not seen a significant number of contracts in the range of EUR 100 million converting into the larger EUR 0.5-1 billion category.

JPMorgan anticipates that 2025 will bring a shift towards multi-energy capital efficiency, which could lead to approximately a 30% reduction in capital expenditure budgets for new energies. This anticipated change poses further challenges for Technip Energies.

Moreover, there is uncertainty surrounding the level of capital expenditure that will be necessary for Technip Energies to invest in new business verticals. The analyst highlighted that the costs associated with these 'adjacent business model investments' are not factored into the group's current guidance, adding another layer of risk for the company's financial outlook.

The downgrade reflects a cautious stance on the company's ability to capitalize on its New Energies segment amid a landscape where capital efficiency is becoming increasingly important and budget cuts in this area are expected.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.