TechnipFMC: Revisiting After Reviewing Our Assumptions Following Discussions With the Company

After reviewing our assumptions following a meeting with management, we raise our fair value estimate for TechnipFMC to $32 from $27. While our income-related assumptions largely remain the same, we previously modeled too high of a working capital outflow for 2026. The adjustment to our balance sheet account projections led to a fair value increase of $4 per share. The remaining $1 increase is due to the time value of money. We remain confident in TechnipFMC's long-term outlook as it has minimal exposure to US land operations, which are short-cycled and more sensitive to oil prices than subsea operations. These subsea operations also offer lower breakevens relative to developing operations on US land, which should allow it to outperform peers who expect a tough onshore business environment in 2025. Still, our conclusion remains directionally the same—we see the stock as overvalued.