HSBC has adjusted its recommendation on TechnipFMC, shifting the stock from Buy to Hold while lifting its price objective to $62.00 from $49.00. At the time of the update, the shares were trading at $61.76, close to the 52-week high of $62.98, after a 104% gain over the prior year.
The bank's rating change accompanies a company earnings update that shows a mixed picture across quarterly and full-year metrics. For the fourth quarter of 2025, TechnipFMC reported revenue of $2.5 billion, a 5% decline from the third quarter. Adjusted EBITDA margin in the quarter contracted by 210 basis points to 17.5%.
The sequential revenue decline in Q4 was driven by seasonal weak spots in both the Subsea and Surface Technologies segments. Surface Technologies revenue fell 2% quarter-over-quarter, although its adjusted EBITDA margin improved to 18% from 16.4% in the third quarter.
On an annual basis, however, the company delivered stronger results. Subsea revenue for full-year 2025 rose 11% to $8.7 billion and the Subsea EBITDA margin expanded by roughly 330 basis points to 20.1%. Surface revenue for the year was essentially flat, but Surface margins widened by about 190 basis points to 16.6%.
Total revenue for 2025 reached $9.9 billion, a 9% increase year-over-year, while adjusted EBITDA margin for the year expanded to 18.4%, up 350 basis points versus the prior year.
Capital return activity moderated in the fourth quarter. Share repurchases slowed to $168 million in Q4 versus a prior $250 million quarterly pace, even though the board authorized a new $2 billion share buyback program on October 22. Liquidity and balance-sheet metrics were constructive at year-end: cash on the balance sheet stood at $1 billion, an increase of $155 million sequentially, and the company reported a net cash position of $600 million.
Free cash flow was $359 million for Q4, bringing the full-year free cash flow total to $1.45 billion, which sat at the top end of the company’s guidance range of $1.3 billion to $1.45 billion.
On earnings, TechnipFMC posted fourth-quarter EPS of $0.70, beating consensus expectations of $0.51. Revenue for the quarter was reported at $2.52 billion, narrowly missing the $2.53 billion analysts had anticipated. The combination of an earnings beat and a slight revenue shortfall produced mixed signals for investors.
Independent valuation commentary referenced in analyst materials indicates the shares look slightly overvalued relative to a stated Fair Value metric, while the company continues to receive a "GREAT" financial health score of 3.42 out of 5 in third-party analysis.
For investors assessing the company, the juxtaposition of sequential quarterly softness and full-year margin improvement, together with a substantial but slowed buyback program and a solid free cash flow outturn, frame the near-term debate. HSBC’s downgrade to Hold, despite a higher price target, highlights how mixed near-term operational trends can temper conviction even when annual results improve.