Having already inked three new contracts with major oil firms BP, Shell and Petrobras this year, TechnipFMC continues to drill toward a new buy point in heavy volume.
The new contracts, combined with another quarter of accelerating earnings and sales growth, have fueled demand for FTI stock. TechnipFMC sports a B+ Accumulation/Distribution Rating, a 1.6 up/down volume ratio and seven quarters of rising fund ownership.
While TechnipFMC did not join partner Petrobras on this month's list of new buys by the best mutual funds, 52 funds with an A+ rating from IBD own shares of FTI stock.
TechnipFMC has also just landed a spot on the IBD Breakout Stocks Index, which gets updated weekly.
See Who Joins TechnipFMC On The IBD Breakout Stocks Index
TechnipFMC Inks Deals With Energy Giants
Organized in two business segments — Subsea and Surface Technologies — TechnipFMC provides fully integrated projects, products and services for the traditional and new energy industries. It works with oil and gas firms to develop energy resources while helping its partners diminish their carbon footprints.
On Feb. 15, Shell awarded TechnipFMC a contract for the first integrated Engineering, Procurement, Construction and Installation (iEPCI) project to use high-pressure subsea production systems rated up to 20,000 psi (pounds per square inch). TechnipFMC will make and install subsea production systems, umbilicals, risers and flow lines for Shell's Sparta development in the Gulf of Mexico.
Last month, TechnipFMC received a contract from BP for another project in the Gulf of Mexico. For BP's Argos Southwest Extension project in the Mad Dog field, TechnipFMC will install pipe and an umbilical, tying back three new wells.
On Jan. 3, TechnipFMC and Petrobras inked a major iECPI contract. The Petrobras deal calls for TechnipFMC to deliver the Mero 3 HISEP project, which uses subsea processing to capture carbon dioxide-rich dense gases and then inject them into the reservoir.
TechnipFMC Fuels Accelerating Growth
Building on its strong turnaround in both earnings and sales, TechnipFMC reported another quarter of accelerating performance on Feb. 22.
The company generated a rebound into double-digit revenue gains in 2022. It has now posted three quarters of accelerating sales growth, including a 23% year-over-year gain to $2.1 billion in its latest report.
Earnings growth has also been impressive. TechnipFMC has posted triple-digit earnings growth in each of the last four quarters, although two of those comparisons were based on gains from a prior year that showed a loss.
For the current quarter, analysts forecast EPS growth of 340%. Wall Street expects a 161% earnings increase this year, followed by a 58% EPS gain in 2025.
FTI Stock Primes Breakout — With This Positive Twist
After breaking out from an 8.77 buy point in a first-stage double bottom in August 2022, shares of FTI shot up over 159% before pulling back to form its current pattern starting in November.
TechnipFMC has now crafted a cup pattern showing a 22.78 entry. Volume in the right side of the cup has been strong as the stock continues to soar above its 50-day moving average — a clear sign of demand.
Note that despite the big climb since November, the new cup is actually a new first-stage base. Such early-stage patterns have a higher likelihood of fueling strong gains. It's considered first-stage because the low in the current cup undercut the low in the prior flat base to reset the base count.
With earnings now safely behind it and strong forecasts ahead, see if TechnipFMC can tap strong insitutitonal demand to pump up a new breakout.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
