Aker Solutions (Buy, TP: NOK26.00) - No triggers in sight
We are below consensus ahead of the Q4 results and see 2020 guidance likely being lowered. While there indeed were a few orders in Q4, we understand some were already included in the backlog reported in Q3, with limited contribution to order intake. Aker Solutions’ momentum in the North Sea is levelling off and we have cut our estimates significantly, pushing cash flow out in time. Following a change of analyst, we have lowered our target price to NOK26 (50) due to the delayed backlog situation, but we reiterate our BUY on attractive valuation.Aker Solutions is a provider of products, systems and services to the oil and gas industry. Through its subsidiaries, Co. is engaged in the field of engineering, design and technology aimed at improving production and recovery. Co. has 3 reportable segments which are the strategic business units of the group: Engineering Solutions (provides concept and front-end studies to oil companies), Product Solutions (delivers oilfield products for the entire upstream value chain, from reservoir through processing), and Field-Life Solutions (offers a range of services, which has the ultimate objective to increase oil and gas recovery from existing fields and extend the operating life of field 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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