26.03.2018 kl 18:54 9239


With roughly USD 60m in backlog for execution in 2018, Magseis needs another USD 40m worth of contracts to meets its USD 100m revenue guidance for 2018. Although the guidance is aggressive, we believe the company is in a good position to secure further contracts ahead as tendering activity currently is at an all-time high level.
Magseis was bidding for contracts worth around USD 300m as of end Q4, and further projects have come out on tender in Q1. We believe the company is in a particular strong position to secure another 7-8 month extension with Saudi Aramco in the Middle East. We also believe the company is currently bidding for several other large projects, including in Qatar and Brazil.
Q1 results should furthermore improve significantly q/q as Q4 was negatively affected by idle time for Artemis Athene before the Red Sea extension commenced in early January. The recent departure of the previous CEO and CFO has created some uncertainty in the market, but with a new management team now in place, this uncertainty will hopefully be eliminated.
The share price has been weak lately and we find the current valuation of EV/EBIT 6x for 2019 and 2x for 2020 attractive for a growth company like Magseis.

We re-iterate our Buy recommendation and NOK 25 target price, which equals 10x EV/EBIT on 2019e and 6x on 2020e.

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