Aker BP (Buy, TP: NOK250.00) - FCF permits higher DPS, ultimately
At the CMD, the DPS announcement got most of the attention. In our view, USD450m (implying a 4.9% yield) was soft, and comments of 5% annual growth would screen unattractively over the next five years. However, we understand that this should serve as a floor with the oil price above USD40/bbl, while with the strong cash generation, there could be upside, albeit unlikely in 2021. We reiterate our BUY and NOK250 target price on the strong production growth outlook.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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