Aker Solutions (Hold, TP: NOK9.00) - Uneventful Q3 before merger
With the share price down 25%+ since the recent renewables spin-offs, we now consider the stock fairly valued and have upgraded to HOLD (SELL). We have raised our target price to NOK9.0 (8.6) to reflect a slightly more favourable exchange ratio than our fair estimate in the Kvaerner merger. We consider expected higher activity in Norway a positive but already reflected in estimates and the valuation. The Q3 report is expected to be uneventful.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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