2Q26 Preview: Lowering Ests on Downhole Margins/Cost Pressures; Revs Unchanged

Research evidence excerpt

2Q26 Preview: Lowering Ests on Downhole Margins/Cost Pressures; Revs Unchanged

June 24, 2026 | 12:27 ET~

Flowco Holdings Inc.

FLOC-NYSE Rating Price: Jun-23 Target Total Rtn US Oilfield Services

Outperform $22.00 $32.00 47%

Phillip Jungwirth, CFA Analyst

phillip.jungwirth@bmo.com (303) 436-1127

Jack Kindregan, CFA VP Associate

2Q26 Preview: Lowering Ests on Downhole Margins/ Jack.Kindregan@bmo.com (303) 436-1115

Ajay Bakshani, CFA Senior AssociateCost Pressures; Revs Unchanged

ajay.bakshani@bmo.com (332) 268-6994

Bottom Line: Legal Entity: BMO Capital Markets Corp.

Flowco pre-announced lower 2Q results, primarily driven by Downhole Components

2YR Price Volume Chart

margins, although core HPGL/VRU businesses, plus Valiant integration is performing 35

well. We also caught up with the company to provide some additional context, 30

which helps to inform our forward outlook. Our 2H26/2027 EBITDA estimates of 25

$190/403mm are trimmed slightly on flowthrough of lower margins, below consensus 20 765

of $196/413mm. We continue to like Flowco’s artificial lift portfolio and high margins, 4

15 3

which deliver strong through-cycle growth, returns, FCF, with valuation inexpensive. 21

10 0

Jun Dec Jun

Key Points LHS: Price ($) / RHS: Volume (mm) Source: FactSet

Company Data in $

We’re lowering our 2Q EBITDA to $91.7mm from $95.2mm with quarterly results pre-

Dividend $0.33 Shares O/S (mm) 90.4announced at low-end, or slightly below $93-97mm EBITDA. The softer 2Q is driven

by margin pressure within Downhole Components (excluding Valiant), which contains Yield 1.5% Market Cap (mm) $1,988

conventional gas lift and plunger lift. Revenues are as expected, with business activity EV (mm) $2,387 Net Debt (mm) $311

healthy across all units, while Valiant is outperforming expectations.