FTI Options: Riding the Bullish Wave with TechnipFMC

TechnipFMC is a technology provider for the traditional and new energy industries. The company operates through two segments: Subsea and Surface Technologies. The Subsea segment provides integrated solutions for subsea oil and natural gas production, including 'FEED', 'SPS', 'SURF', and robotics, targeting major integrated oil companies, national oil companies, and independent exploration and production companies. Key offerings include 'iEPCI' and 'Subsea 2.0'. The Surface Technologies segment designs, manufactures, and services integrated products and systems for land and shallow water exploration and production, as well as carbon transportation and storage, hydrogen storage, and geothermal production. Products include drilling and completion systems, wellheads, and pressure pumping equipment, including 'iComplete' and 'CyberFrac'. TechnipFMC differentiates itself through technological innovation, integrated solutions, reliability, and product quality, focusing on reducing costs, cycle time, and carbon intensity for its clients.

The directional outlook for FTI (TechnipFMC) over the next 1-2 weeks is moderately positive. The primary driver for this assessment is the analyst upgrade from Jefferies, maintaining a Buy rating and raising the price target to $50. This suggests an expectation of approximately 6-10% upside from the current trading levels, depending on the starting price. Analyst upgrades, particularly those involving a price target increase, often lead to short-term positive price momentum as other investors react to the revised valuation. While no other company-specific or significant macro news is present to either reinforce or counter this signal, the analyst's conviction, as evidenced by maintaining the 'Buy' rating, adds weight to the price target revision. Options traders should consider this positive sentiment, factoring in potential volatility associated with market reactions to analyst reports.

FTI's technical outlook leans moderately bullish. The stock has demonstrated a clear upward trend over the past 90 days, rising from approximately $32.44 on June 30, 2025, to $41.86 as of November 4, 2025. The price is currently trading above its 21-day EMA of $39.34 and its 50-day SMA of $38.64, which supports the bullish sentiment. The 200-day SMA is $33.05. Momentum indicators also favor the upside. The MACD at 0.997 is positive and above its signal line (MACDs of 0.465), indicating bullish momentum. The RSI of 67.02 suggests the stock is approaching overbought territory, but there is still room for further gains. The Stochastic Oscillator (STOCHk) at 87.77 and STOCHd at 88.78 also confirm the strong upward momentum. Recent price action shows a breakout above previous resistance levels, with the stock testing new 52-week highs. While a pullback is possible, the overall trend and momentum suggest continued upside potential in the short to medium term.

TechnipFMC's MD&A presents a positive trajectory, particularly in the Subsea segment. For the three months ended September 30, 2025, revenue increased by $298.9 million (12.7%) year-over-year, primarily driven by a $291.1 million increase in Subsea revenue. Gross profit also improved, rising to $603.8 million from $493.8 million in the prior year. Subsea gross profit saw a substantial increase of $110.5 million, attributed to both volume and favorable activity mix. The company's 'Subsea backlog' increased by $2,520.1 million since the end of 2024, reaching $16,038.2 million as of September 30, 2025, indicating strong future revenue potential. Operationally, cash flow from operating activities shows a significant improvement, with $1,311.0 million provided during the nine months ended September 30, 2025, compared to $382.1 million in the same period of 2024. This increase of $928.9 million is attributed to increased Subsea volume and a better project mix. The company is actively returning capital to shareholders, with $750.2 million in share repurchases during the nine months ended September 30, 2025, and an additional $2.0 billion repurchase program authorized in October 2025. Management expresses confidence in exceeding $10 billion of 'inbound' Subsea orders in the current year and maintains a positive long-term outlook for the offshore market.

TechnipFMC's Q2 2025 earnings call conveys a moderately bullish sentiment, driven by strong Subsea performance and an improved outlook. The company reported a solid quarter with total company revenue of $2.5 billion and adjusted EBITDA of $509 million. Management is confident in achieving more than $10 billion of Subsea inbound for the year, with CEO Douglas Pferdehirt stating, 'The uniqueness and diversity of our order book gives us continued confidence.' Subsea services were particularly robust, representing one of the highest quarterly inbound levels ever achieved. The company is increasing its full year guidance for total company adjusted EBITDA by $40 million, expecting to deliver $1.8 billion, a 30% increase versus the prior year. CFO Alf Melin noted, 'given the strength in Q2, we have solid momentum as we enter the second half of the year.' The company also reiterated its commitment to distribute at least 70% of free cash flow to shareholders, highlighting the strength of their balance sheet. While the market has challenges, TechnipFMC's focus on new commercial models, configurable product offerings, and strong customer relationships positions them well for continued success.

FTI's financial performance presents a mixed but cautiously bearish picture. Revenue has shown growth, increasing from $2.042B in Q1 2024 to $2.6473B in Q3 2025. However, the grossProfitRatio has fluctuated significantly, with a concerning drop to -0.3997 in the most recent quarter, indicating potential cost management issues. Operating cash flow has been volatile, with a recent value of $344.2M in Q2 2025, but no data for Q3 2025, making it difficult to assess the current trend. Total debt decreased from $1.9203B in Q1 2024 to $33.6M in Q3 2025, which initially appears positive, but this is offset by a negative gross profit of -$1.0582B. The substantial swing in gross profit and lack of recent cash flow data raise concerns about the company's short-term financial health. While revenue growth is present, the profitability and cash flow inconsistencies, coupled with the negative gross profit, warrant a cautious outlook.

The company presents a moderately bullish investment profile based on its key metrics and financial ratios. Revenue has shown positive growth, indicating a healthy demand for its products or services. The gross margin has remained relatively stable, suggesting efficient cost management. The Return on Equity (ROE) indicates a solid return for shareholders. The Price-to-Earnings (P/E) ratio suggests the company is appropriately valued by the market. The debt-to-equity ratio has seen a decrease, showcasing the company's improved financial leverage. The current ratio signifies the company's strong ability to meet its short-term obligations. Overall, the company demonstrates a stable and growing business model with a healthy balance sheet, making it a moderately attractive investment for the next 6-12 months.