Barclays increased its price targets across the European energy services group by roughly 21% on average, and switched its valuation methodology to a price-to-earnings framework using a 15x multiple on 2027 estimates, moving away from a discounted cash flow approach, the bank said on Monday.
The broader sector has already exhibited sharp gains: the EMEAOGP sector index rose about 30% in the first quarter of 2026 and was trading at approximately 15x 2026 estimated P/E, according to the report.
Barclays framed the changes in the context of several structural demand drivers. The brokerage pointed to the need for inventory replenishment, repair work following physical damage in the Middle East, and a global emphasis on domestic energy security as forces that should support services demand over time. The bank also noted a seasonal risk for services in the April-May period, observing a historical pattern of limited upside potential and relatively negative EPS momentum versus producers over a sample covering 2004-2012.
Rating and target moves
As part of the update, Barclays made a number of rating changes across its coverage:
- Technip Energies and Viridien were upgraded to overweight.
- Saipem, Subsea 7 and SBM Offshore were moved to equal weight.
- Aker Solutions and Hunting were downgraded to underweight.
- ADNOC Drilling kept its overweight rating.
Technip Energies saw the largest rating revision: the stock was raised from underweight to overweight and given a new price target of 254, up 33% from 240.50. Barclays noted that Technip had underperformed the sector by more than 30% since late 2025.
Viridiens price target was lifted to 200 from 200 from 2150, a 33% increase from the prior target of 2150 to 2200. Barclays said that implied upside stood at 64% at the time of publication, and referenced an above-consensus utilisation rate of 91% reported in the companys first-quarter operational update.
TGS registered the largest absolute increase in price target, with Barclays raising it by 48% to NOK200 from NOK135. The brokerage noted that its 2026 EBIT estimate for TGS was 66% higher than the company-derived consensus.
Downside moves and forecast revisions
Aker Solutions was moved to underweight with a revised price target of NOK49. While that target is up 11% in nominal terms versus the prior target, Barclays said it represented only 28% implied upside after the stock had already climbed 45% year-to-date.
Hunting was also downgraded to underweight and assigned a new target of GBp6, up 9% from its prior target. Barclays trimmed 2026-28 EBITDA forecasts for Hunting by 3-5%, citing an expected slower rebound in Kuwait OCTG demand.
ADNOC Drilling was maintained at overweight, although its price target was cut to AED7.20 from AED7.60, a 5% reduction. Barclays applied a 20x 2027 P/E to ADNOC Drilling versus the 15x sector baseline to reflect the companys take-or-pay contract structure with ADNOC.
Forecast adjustments and valuation checks
Barclays trimmed its 2026 EBITDA forecast for the coverage universe by 4% after disruptions to Qatar LNG operations, while increasing 2027-28 EBIT estimates by between 10% and 16%.
The bank said it conducted reverse discounted cash flow checks to support the new targets, aligning terminal margins to averages seen in the 2020s across the coverage universe. That alignment implied differing terminal margin assumptions across names: 21% for Subsea 7, 63% for TGS, and 43% for Viridien, per Barclays review.
Barclays also highlighted the market context for its revisions, noting that oil prices rose about 95% in the first quarter of 2026 amid Middle East tensions. The brokerage identified both cyclical and structural elements underpinning its updated outlook for services demand.