On Monday, Piper Sandler maintained its Overweight rating on shares of TechnipFMC (NYSE:NYSE:FTI), with a price target set at $34.00. The firm's stance comes in light of the recent trends in the rig count and the company's performance in the industry.
The Baker Hughes L48 rig count, a key indicator of drilling activity, continued its decline last week, dropping by 7 rigs to a total of 560. This year-to-date reduction of 42 rigs brings the count closer to Piper Sandler's projected year-end exit rate range of 525 to 550 rigs. The analyst believes that this downward trend will persist through the remainder of the year.
TechnipFMC, along with other companies such as Baker Hughes, XPRO, and Weatherford International (NASDAQ:WFRD), has been the focus of Piper Sandler due to their international and offshore operations or diversified businesses beyond oilfield services. Last week, TechnipFMC representatives were on the road in Los Angeles, showcasing the company's potential and strategy.
The analyst also highlighted the margin improvement story of XPRO, noting that its EBITDA margins are expected to increase from the current year's guidance of 20%-22% to the high 20% range within a few years. For TechnipFMC, the current 18% Subsea margin guidance for 2025 is not seen as the peak but rather a milestone towards more significant achievements in the future.
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