07.09.2018 kl 13:09 5298

DnB Markets har lavest kursmål for ODL blant de husene som dekker aksjen, nå NOK 43. De estimerer NAV til NOK 43,70. Så da verdsetter de ODL til NAV som er lavere enn jeg antar going concern verdien er. Aksjekurs nå på 32-tallet tilsier mer enn 25% rabatt på NAV. Interessant nok det DnB beskriver i en fersk oppdatering på ODL:

Attractive harsh environment story

We consider Odfjell Drilling’s relative valuation to be
attractive at current levels; on our estimates it is trading
at an implied steel value per 6G harsh semi of
USD364m, well below other recent data points. Odfjell
Drilling has benefited from its exposure to the high-spec
harsh-environment segment. With all rigs on contract
and market-linked upside potential in rates, it is perfectly
positioned, in our view. We see potential upside to our
NAV, reiterate BUY, and have raised our target price to
NOK43 (NOK40), mostly due to currency.

Company description. Odfjell Drilling is an integrated oil services company, with more
than 40 years in the offshore drilling industry. In addition to operating a fleet of offshore
drilling rigs, it is active in Well Services and Drilling & Technology. Odfjell Drilling’s fleet
consists of three harsh and ultra-deepwater semis, and one standard harsh semi. The
company was listed in Oslo in 2013.

Investment case. The high-spec harsh market is one of very few niches in the rig
market that is seeing a positive trend. Still, we consider oil companies to be highly
selective in terms of preference for rigs and counterparties. In our view, Odfjell Drilling
has built a strong operational track record, demonstrated by its drilling efficiency for both
Statoil and Wintershall, and its alliance with Aker BP. During 2017, tendering activity in
the harsh segment was high and following conclusion of the Statoil frame agreements,
we expect a temporary slowdown in news flow; however, at the same time we believe
Odfjell Drilling will have put all its rigs on long-term contracts at solid dayrates and
consequently have limited exposure to any temporary slowdown in tendering activity

Valuation and recommendation. We estimate that Odfjell Drilling is trading at an
implied steel value of USD364m, which is a discount to peers. Following currency
movements, we have raised our target price to NOK43 (NOK40), supported by our
NOK43.4/share NAV. Furthermore, we believe a potential spin-off off Well Services
could help visualise underlying values.

DnB antyder verdi på NOK 50 i deres bull case. Our bull-case fair value is based on a
potential M&A scenario similar to the Transocean/Songa transaction.

Upside risks to our investment case

* Divestment of divisions at, or above,
our valuation could unlock value well
above the current valuation in the
equity market.
* Further improvement in dayrate
environment from the current levels.
* Oil companies increase E&P spending

DNB Markets investment case and
how we differ from consensus

* We believe harsh-environment
exposure is somewhat more protected
in this market environment.
* We expect the valuation gap towards
the peer group and recent secondhand
transactions to close.
* With a more diversified portfolio (well
services and platform drilling) than
other drilling contractors, we believe it
has certain defensive features in a
falling market and leverage on the
upside in a recovery.

Downside risks to our investment

* A further weakening of the rig market,
leading to declining dayrates and the
stacking of rigs.
* If rigs go idle, we see further downside
to estimates and asset valuations.
* Reduced offshore E&P spending.
Redigert 07.09.2018 kl 13:22

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