Aker Solutions (Buy, TP: NOK60.00) - Particularly good time to step in
With limited orders in H1 and low backlog coverage for 2020, the stock has materially trailed peers YTD. We estimate it is trading at a ~10% EV/EBITDA discount to Subsea 7 (~40–50% premium historically), but with prospects for several important contracts, we see the underperformance reversing. Also, after hefty investment in recent years, on current pricing we see 10–15% cash flow yields from 2020, better than most oil service names we cover. We keep our BUY and NOK60 target price.Akastor is a provider of products, systems and services to the oil and gas industry. Co. has three reportable segments: Engineering Solutions, which provides concept and front-end studies to oil companies; Product Solutions, which delivers oilfield products for the entire upstream value chain, from reservoir through processing and also includes Subsea, Drilling, Umbilicals and Process Systems; and Field-Life Solutions, which provides a range of services to increase oil and gas recovery from existing fields and extend the operating life of field assets. This segment also consists of two business areas: Maintenance, Modifications and Operations and Oilfield Services and Marine Assets.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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