Aker Solutions (Buy, TP: NOK45.00) - Attractive stub valuation
Q1 was good, with a 4% EBITDA beat, solid cash flow, and decent order intake. We have raised our 2024e EBITDA by 8% largely due to subsea, which has no valuation impact as we value subsea on the transaction value with SLB and Subsea 7. Assuming our fixed-price valuation of subsea, we calculate the stub is trading at a 2024e EV/EBITDA below 2x. We see an attractive entry point and reiterate our BUY and NOK45 target price, reflecting a 2024e EV/EBITDA of c4.5x for the stub.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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