Kosmos Energy cut at Goldman while Buy ratings reiterated for Talos Energy, TechnipFMC

Kosmos Energy (NYSE:KOS) -1.5% in Monday's trading as Goldman Sachs downgraded shares to Neutral from Buy with a $2 price target, slashed from $3, given recent operational challenges and an elevated leverage profile, while highlighting Buy ratings for Talos Energy (NYSE:TALO) and TechnipFMC (NYSE:FTI).

Goldman analysts led by Neil Mehta views Kosmos (NYSE:KOS) as a higher cost producer, requiring a high commodity price to generate outsized free cash flow, and while the bank is constructive on long-term oil prices, particularly as non-OPEC production rolls off and OPEC works through spare capacity, it sees potential for near-term commodity price risk.

Mehta lowered his total production outlook for Kosmos (NYSE:KOS), driven largely by Jubilee, where softer results last quarter were caused by a period of riser instability and underperformance of certain wells, as well as a scheduled FPSO shutdown, while seeing downside risk to consensus estimates due to operational challenges.

Meanwhile, the bank raised its operating cost profile to reflect greater execution risk and higher than expected expenses at Tortue, resulting in reducing the cash flow inflection in its original estimates for 2026-27, noting that Kosmos (KOS) has guided to $225-$245 million of production costs associated with Tortue for FY 2025.

Meanwhile, Goldman continues to highlight Buy-rated Talos Energy (NYSE:TALO) among offshore-focused E&Ps for its strong track record of execution, continued focus on scale, and lower
leverage relative to peers, and TechnipFMC (NYSE:FTI) as a defensive offshore name with a clear line of sight to $10 billion in annual subsea orders through 2030.