TechnipFMC shows strong margin gains; Saipem valued cheaper despite growth potential in oil services.

TechnipFMC has improved its profit margins through careful project bidding and integrated delivery, approaching its medium-term targets. Its backlog, especially in subsea projects, is growing robustly, which should support further margin expansion as older contracts end. However, Saipem trades at a significant discount compared to TechnipFMC and may benefit from margin recovery, backlog digestion, and synergies from its merger with Subsea 7. Despite recent rallies in oil services stocks, oil futures suggest activity levels may normalize by late 2026, possibly limiting sustained growth in the sector.