Berenberg Cuts Technip Energies Price Target Amid Middle East Cost Headwinds; Buy Rating Kept
Berenberg lowered its price target for Technip Energies (TE.PA) to 40 euros from 45 euros, as analysts noted cost headwinds in the French energy infrastructure company's Middle Eastern projects."Activity on the company's Middle East projects was normalising through Q2, but costs increased given the additional logistics and safety measures required (an incremental EUR30m-40m per quarter). There are also certain disputed items that Technip Energies should be reimbursed for. Prudently, the company has provided for these additional costs, which led to PD Q2 EBITDA margins declining by 590bp yoy to 1.7% and an FY26 EBITDA margin guidance cut to more than 5.0% (from 6.5-7.5%)," according to a Monday note.Subsequently, the research firm reduced its sales, EBIT, and EPS projections for 2026 to 2028 to reflect the revised guidance, the ongoing disruption and the "likely dilutive" impact from future cost recoveries.On the flip side, Berenberg noted a potential upside to the margin guidance, modelling 5.5% for 2026. "We think there is upside to current margin guidance as client agreements are finalised, assuming the conflict does not intensify further. Despite this, the exceptionally high order intake underscores the strong medium-term outlook, reinforced by a record EUR25bn backlog."The stock's buy rating is unchanged.
