Technip Energies Upgraded by RBC on Record Backlog and Undervalued Shares

RBC Capital Markets upgraded Technip Energies (TE) to “outperform” from “sector perform,” arguing that a record order backlog and the likelihood of future cost recoveries make the engineering firm's shares undervalued after a period of underperformance.

The Analyst Call

RBC lowered its 12-month price target on the stock to €42 from €45, but the new target still implies an upside of approximately 41% from the stock's closing price of €29.72 on September 9, according to the analyst note. The firm's upgrade is based on the view that the market has overly penalized the company for recent headwinds.

Analysts at RBC noted that Technip Energies has lagged its European oilfield services peers by about 10% year-to-date. This underperformance was driven by two successive guidance cuts related to its operations in Qatar and broader uncertainty tied to conflict in the Middle East.

Record Backlog Signals Growth

The bullish outlook is underpinned by Technip's exceptionally strong order book, which provides significant revenue visibility. Key figures reported by the company include:

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• €25.04 billion in adjusted backlog at the end of the first half of 2026, a substantial increase from €15.96 billion at the end of 2025.
• A record €12.7 billion in order intake year-to-date.
• A book-to-bill ratio of 3.5 times, indicating that new orders are far outpacing current revenue.

Notably, RBC highlighted that the majority of this new business comes from outside the Middle East, diversifying the company's project pipeline.

Valuation and Cost Recovery Potential

RBC believes Technip's management has been conservative in its financial guidance by assuming no recovery of higher operational, safety, and procurement costs incurred in the conflict zone. While the company's CFO, Bruno Vibert, has stated some costs are not recoverable, others are subject to negotiation with clients.

RBC's forecasts do not include any cost recoveries, but the firm noted that recovering just 50% of the 2026 costs could boost the Project Delivery division's EBITDA margin by 90 basis points in 2027. At its current price, RBC said Technip Energies trades at a discount to its five-year averages and to its peers in the Middle East engineering and construction sector.