TechnipFMC (Hold, TP: USD8.50) - Not shielded from market collapse
With the oil price collapse and subsequent deep capex cuts by the oil companies, we expect challenging market conditions for oil services. Compared to most names in the sector struggling with too much debt and set to face painful restructuring near-term, we see TechnipFMC as a more attractive option within oil service exposure. However, at an adjusted 2-year EV/EBITDA of ~5.5x, we find the shares fairly valued, and following a change of analyst we have cut our target price to USD8.5 (24) and downgraded our recommendation to HOLD (BUY).TechnipFMC is global leader in oil and gas projects, technologies, systems, and services. Co. offers subsea, surface, onshore, and offshore solutions for oil and gas projects. Co. serves customers worldwide. With Co.'s technologies and production systems, integrated expertise, and comprehensive solutions, Co. is transforming Co.'s clients' project economics. Co. is uniquely positioned to deliver greater efficiency across project lifecycles from concept to project delivery and beyond. Through innovative technologies and improved efficiencies, Co.'s offering unlocks new possibilities for Co.'s clients in developing their oil and gas resources.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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