Archer (Buy, TP: NOK6.00) - Steady improvement should help refinancing
We expect Q2 EBITDA of USD26m, up slightly from Q1’s USD25m. We believe the main focus for Archer will be a steady improvement in financials and cash flow to ease the 2019–2020 refinancing. With net debt to EBITDA of 4.5x in 2020e, we are optimistic it will be able to extend debt maturities. While we have raised our 2019–2021e EBITDA by c15%, we have lowered our SOTP-based target price to NOK6 (7) due to part-owned Quintana Energy Services’ weak share price performance. We maintain our BUY recommendation.
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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