FTI

ANALYST NOTE: FTI (TechnipFMC plc) Date: 2026-06-13

(1) Structural Readiness As of the close on 2026-06-13, FTI presents a confirmed coil setup. The breakout signal has fired, and the setup is currently actionable.

• Conservative Entry: $78.61
• Current Price: $77.45
• Extension: -1.5% vs. conservative entry.
• Breakout Level: The setup requires a close above the consolidation high to confirm the structural breakout; the current price is trading slightly below the conservative entry threshold, indicating a minor pullback within the active setup structure.
• Volatility Context: The ATR at breakout was 3.2% (productive), and the current ATR remains 3.2% (productive). This indicates structural quality and appropriate volatility for position sizing, sitting within the historical "productive" range.
• Setup Status: The presence of a confirmed coil is a partial positive readiness signal. It indicates that the market structure has validated a base and initiated a breakout phase. The current price action represents a retest or consolidation within the active setup, not a failure of the structure.

(2) The Thesis Layer At this date, FTI is classified as a TACTICAL, setup-led name. There is no named secular thesis attached to this specific setup in the current evidence base. The conviction for this position must be derived strictly from the quality of the technical setup (the confirmed coil) and the immediate business fundamentals provided in the recent earnings and filings. We do not invent a macro thesis; we judge the name on the intersection of its structural readiness and its operational execution as reported by management.

(3) The Business TechnipFMC plc operates as a global technology and services provider in the energy industry, with a primary focus on the Subsea and Surface Technologies segments.

• Subsea Segment: As of March 31, 2026, the Subsea backlog stood at $15,800.4 million. This backlog includes major projects such as TotalEnergies' Mozambique LNG, bp's Tiber and Kaskida, Equinor's Raia, and Petrobras' Mero 3 HISEP®. Management reported that Subsea revenue increased by $272.2 million in the quarter ended March 31, 2026, driven by higher backlog and upstream spending.
• Order Activity: In the quarter ended April 30, 2026, orders totaled $1.9 billion, driven by robust services and unannounced project activity. Management stated a strengthening trend in order activity, supporting their confidence in achieving $10 billion of Subsea orders in 2026.
• Opportunities Pipeline: The Subsea opportunities list identified approximately $30 billion of potential awards over the next 24 months, marking the seventh consecutive quarterly increase in value.
• Strategic Shifts: The company is executing a shift from bespoke engineer-to-order solutions to a CTO (Configure-to-Order) execution model via "Subsea 2.0®." Management expects this to result in up to 25% lower product costs and a 12-month reduction in delivery time for subsea production equipment.
• New Energy: The company is executing first-of-its-kind projects in carbon capture and storage (CCS), including the Northern Endurance Partnership in the UK and the Mero 3 HISEP® project in Brazil.

(4) The Archetype and Conviction

• Archetype: Cyclical Recovery. The name fits this archetype due to the visible inflection in order books, the expansion of the backlog, and the management's guidance pointing toward a step-up in inbound orders in 2027. The business is transitioning from a period of execution to a period of accelerated growth driven by the "Subsea 2.0" efficiency gains.
• Valuation & Financials: The financial spine indicates a forward consensus EPS of $2.96 for FY1 and $3.52 for FY2. This implies a market expectation of earnings growth that aligns with the management's guidance for increased Subsea inbound revenue and EBITDA margins in 2027.
• Conviction Stack:
• Thesis Strength: Moderate (Tactical, no secular thesis, but strong operational data).
• Evidence Quality: High. Multiple primary sources (earnings transcripts, SEC filings) confirm backlog growth, order strength, and margin expansion.
• Structural Quality: High. The ATR is "productive" (3.2%), and the setup is a "confirmed coil."
• Setup Readiness: Actionable. The breakout has fired, though the price is currently in a minor extension relative to the conservative entry.
• Rerating Potential: Significant. The combination of a $30B opportunity list, a $10B order target for 2026, and the "Subsea 2.0" cost reduction model provides a clear path for margin expansion and multiple re-rating if execution holds.

(5) Invalidations, Strengths, and Gaps

• What Would Strengthen: Continued execution of the $10B Subsea order target for 2026; further expansion of the $30B opportunity list; successful realization of the 25% cost savings from Subsea 2.0; and sustained margin expansion in the Subsea segment.
• What Would Invalidate: A significant contraction in the Subsea backlog (e.g., project cancellations or delays exceeding the $71.3M decrease seen in Q1); a failure to meet the $10B order target for 2026; or a breakdown in the "Subsea 2.0" cost reduction thesis (e.g., delivery times failing to shorten).
• Gaps in Evidence: While the backlog and order book are robust, there is no specific evidence in the current file regarding the *realization* of the 2027 margin targets beyond management's stated belief. The specific impact of the "Subsea 2.0" cost savings on the *next* quarter's gross margin is not yet quantified in the provided evidence, only the *potential* for it.

PRIVATE ANALYST CALL

Judgment: Buy Confidence: medium Key evidence: Confirmed coil setup with productive ATR; $15.8B Subsea backlog and $1.9B quarterly orders; Management guidance for $10B Subsea orders in 2026 and $30B opportunity pipeline. Key risks: Execution risk on Subsea 2.0 cost reduction targets; potential for project delays in the $30B opportunity list; cyclical downturn in upstream spending. Rating boundary: This is rated Buy rather than Strong Buy because the setup is currently trading at a -1.5% extension from the conservative entry, indicating a lack of immediate momentum confirmation, and the thesis is tactical rather than backed by a named secular macro thesis. It is rated Buy rather than Speculative because the evidence base is robust with primary filings confirming a multi-year backlog and clear management guidance. Sizing hint: Standard position sizing for a confirmed coil with productive volatility; reduce size slightly due to the current price extension below entry. Expected path: Management expects a step-up in inbound orders in 2027 and continued margin expansion as Subsea 2.0 efficiencies are realized. The backlog should convert to revenue, supporting the FY1 and FY2 EPS consensus. Expected horizon: 12 to 24 months, aligning with the 24-month opportunity list and the 2027 margin inflection guidance. Failure mode to watch: A material reduction in the Subsea backlog or a failure to achieve the $10B order target for 2026, which would signal a breakdown in the cyclical recovery thesis.