Still strong M&A potential
Q3 EBITDA was in line with our expectation, while adjusted operating cash flow was 4% above. We reiterate our BUY recommendation due to Aker BP: 1) aiming to double production organically by 2023; 2) having a strong balance sheet; 3) seeking further accretive M&A opportunities; and 4) trading at a 4.3% dividend yield, which should increase further when Sverdrup starts up. We have raised our target price to NOK203 (187) on the back of the stronger USD/NOK, and increased the M&A premium to 15% (10%).Aker BP ASA engages in the exploration, development, and production of petroleum resources on the Norwegian Shelf. In addition, Co. has a separate Johan Sverdrup business unit to manage its interest.
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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