Aker Solutions (Hold, TP: NOK48.00) - Small SOTP discount removed
Having repeatedly said a capital allocation strategy update would be provided with the Q4 results, it surprised the market by announcing a dividend of NOK21/share (46% of market cap) prior to the Q3 results, effectively meaning all liquid investments are to be distributed. We expect focus to be on the value of ‘the stub’, its 20% OneSubsea stake and proper working capital adjustments. As our SOTP had a 5% discount on the items now being distributed, we have increased our target price to NOK48 (46), while we reiterate our HOLD.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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