OII · Oceaneering International
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $40.62
Note written ·
Price against the kill line
12.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $40.62, on record since 11 November 2026. The shares are down 34.2% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $40.62, the 200-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Energy
Quarter to 30 September 2026, filed 22 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 785
- Revenue, change on a year (%)
- +5.6
- Gross margin (%)
- 21.0
- Operating margin (%)
- 11.7
- Free cash flow, four quarters ($M)
- 288
- Net cash, cash less debt ($M)
- 251
- Price to earnings (×)
- 10.7
- Enterprise value to sales (×)
- 1.1
All filed numbers
What Oceaneering International reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 785 | +5.6 | 21.0 | 11.7 |
| first filed | 768 | +10.0 | 20.4 | 11.5 |
| first filed | 692 | +2.7 | 18.4 | 8.3 |
| first filed | 669 | −6.3 | 19.8 | 9.8 |
| first filed | 743 | +9.3 | 20.6 | 11.6 |
| first filed | 698 | +4.4 | 21.3 | 11.3 |
| Pre-tax income ($M) | 69.1 |
| Net income ($M) four quarters: 331 | 52.6 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −0.2 |
| Operating cash flow ($M) | 380 |
| Capital spending ($M) | 92.1 |
| Free cash flow ($M) | 288 |
| Cash and short-term investments ($M) | 742 |
| Debt ($M) non-current long-term debt | 491 |
| Net cash, cash less debt ($M) | 251 |
| Deferred revenue ($M) +14.7% on a year | 135 |
| Backlog, orders not yet delivered ($M) +2.5% on a year | 415 |
| Receivables ($M) | 449 |
| Inventory ($M) | 177 |
| Shareholders' equity ($M) | 1,222 |
| Market value ($M) | 3,543 |
| Enterprise value, market value plus net debt ($M) | 3,292 |
| Enterprise value to sales (×) | 1.1 |
| Enterprise value to operating income (×) | 10.8 |
| Price to earnings (×) | 10.7 |
| Price to book value (×) | 2.9 |
| Free-cash-flow yield (%) | 8.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.0% of shares outstanding sold short, 9.8 days of average trading to cover, 0.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $530K |
| 12 monthsfrom | $0 | $11.6M |
The thesis
Oceaneering International's shares have fallen to a $35.06 close (10 November 2026) because fourth-quarter EBITDA guidance of $85–95 million outweighs a 2027 outlook of $430–480 million; the fourth-quarter report, expected around February 2027, is the first test of that outlook. The call stays cautious until revenue and backlog show the 2027 range is reachable.
The company reported third-quarter results on 21 October 2026. Revenue was $784.554 million against a $773.229 million estimate, and adjusted earnings per share (EPS) were $0.50 against $0.58 expected (Benzinga, 21 October 2026). Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $119.4 million, inside the $115–125 million range given on 23 July 2026.
The shares closed at $41.61 on 28 October 2026 and at $35.06 on 10 November 2026, which is 35.2% below the $54.11 52-week high and 31.7% lower over three months. The 14-day relative strength index (RSI) is 28.6.
The story is well known: the offshore recovery is well known, and the shares have lost ground since the 21 October 2026 report. Citigroup kept a Neutral rating and lowered its target to $45 on 29 October 2026. Barclays kept Equal-Weight with a $42 target on 26 October 2026.
Bullish and bearish views on Oceaneering International Inc.
The bull case on Oceaneering International Inc. (OII), in brief: 2027 guidance sits above 2026. The bear case: fourth-quarter EBITDA is guided sharply lower.
Bull case
- 2027 guidance sits above 2026. Management set 2027 EBITDA at $430–480 million, against $400–440 million for full-year 2026 given in July, and expects 2027 free cash flow to exceed 2026 (company 8-K exhibit 99.1, 21 October 2026).
- Subsea Robotics earns high margins. Operating income was $75.4 million at a 32% margin in the third quarter, up 16% (company release, 21 October 2026).
- The balance sheet is liquid. Cash was $735 million at 30 September 2026, long-term debt was $491 million, and third-quarter free cash flow was $142 million (company 8-K, 21 October 2026).
- Eastern Mediterranean work is a new source of orders. Euronews reported on 26 October 2026 that nine agreements worth about $1.8 billion for the Cronos gas field off Cyprus were signed, with Oceaneering among the named companies. Company news on 4 November 2026 carries the same headline. Coverage gives no figure for Oceaneering's own scope.
- Analyst targets sit above the price. Citigroup's target is $45 and Barclays' is $42, both above the $35.06 close on 10 November 2026.
Bear case
- Fourth-quarter EBITDA is guided sharply lower. Management expects $85–95 million after $119.4 million in the third quarter, as remotely operated vehicle utilization falls with rigs leaving the U.S. Gulf (company release, 21 October 2026).
- Earnings per share missed. Adjusted EPS of $0.50 was below the $0.58 estimate. Net income attributable to the company fell 26% to $52.6 million after a $19.0 million loss on debt extinguishment (company release, 21 October 2026).
- Manufactured Products orders are shrinking. Backlog was $435 million at 30 September 2026 against $568 million a year earlier, and trailing 12-month book-to-bill was 0.77 (company 8-K, 21 October 2026).
- Analysts are lowering targets. Citigroup cut its target to $45 on 29 October 2026 and Barclays cut to $42 from $47 on 26 October 2026. Only four analysts were on S&P Global's panel as of 2 October 2026, so each change moves the average.
- The price decline has continued. The shares fell from $41.61 on 28 October 2026 to $35.06 on 10 November 2026 with no company report in between.
Price setup
The adjusted close on 10 November 2026 was $35.06, 35.2% below the $54.11 52-week high. The three-month price change is −31.7%. The three-month decline was 14.7% and the RSI was 41.2 on 28 October 2026.
An RSI of 28.6 is in oversold territory. It marks a fast decline, not a recovery. MarketBeat reported the shares trading near $33 intraday on 13 March 2026 after a 6.6% fall; that earlier trading range is the nearest reference below the current price.
Crowding evidence is limited. No SEC filings appear in the last 30 days, and no earnings report falls inside the next 30 days. The visible pressure is on the sell side, where two firms cut targets within a week of the report.
Catalysts ahead
- ~31 December 2026 (est.): Year-end Manufactured Products backlog (reported with fourth-quarter results). Shows whether backlog stabilised from $435 million at 30 September 2026 and whether book-to-bill rose above 1.0.
- ~February 2027 (est.): Fourth-quarter and full-year 2026 report. First check of the $85–95 million fourth-quarter EBITDA guide and the $430–480 million 2027 outlook.
What would change the view
A daily close above $40.62, the 200-day average of closes (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
Oceaneering's results follow offshore oil and gas spending by operators, especially rig activity in the U.S. Gulf, which management cited for the fourth-quarter Subsea Robotics decline. The Cronos work ties part of the story to Eastern Mediterranean gas, with first gas targeted for 2028 according to Euronews. Peer returns and oil-price correlations were not measured for this note.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $784.554 million against a $773.229 million estimate; adjusted EPS was $0.50 against $0.58 expected. Benzinga, 21 October 2026 · as of
- Third-quarter adjusted EBITDA was $119.4 million; free cash flow was $142 million; cash was $735 million at quarter-end. Oceaneering 8-K exhibit 99.1, 21 October 2026 · as of
- Management guided fourth-quarter 2026 EBITDA to $85–95 million and initiated 2027 EBITDA guidance of $430–480 million. Oceaneering 8-K exhibit 99.1, 21 October 2026 · as of
- Manufactured Products backlog was $435 million at 30 September 2026 versus $568 million a year earlier; trailing 12-month book-to-bill was 0.77. Oceaneering 8-K exhibit 99.1, 21 October 2026 · as of
- Citigroup maintained Neutral on Oceaneering and lowered its price target to $45. Company news, 29 October 2026 · as of
- Barclays maintained Equal-Weight and lowered its price target to $42 from $47. Benzinga, 26 October 2026 · as of
- Nine agreements worth about $1.8 billion for the Cronos gas field off Cyprus were signed, with Oceaneering among the named companies; first gas is targeted for 2028. Euronews, 26 October 2026 · as of
- The shares closed at $41.61 on 28 October 2026 and $35.06 on 10 November 2026; the 52-week high is $54.11. Split/dividend-adjusted daily closes · as of
Sources
- Cyprus signs $1.8bn deal to develop first gas field, with exports to Europe via Egypt · euronews.com ·
- Cyprus Signs $1.8 Billion Gas Deal, Targets First Production in 2028 · greekreporter.com ·
- Egypt's Petrojet wins key contracts in Cyprus' Cronos gas field development project · en.amwalalghad.com
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