Archer (Buy, TP: NOK1.50) - Lagging behind peers
We forecast Q2 EBITDA of USD29m (no consensus available), up 14% QOQ, partly driven by the contribution from acquired businesses (including Baker Hughes’ UK coiled tubing business). Archer’s share price is lagging behind peers and is up only 14% since early June, while key offshore drillers and well services companies are up 30%. The gap is even larger on an EV basis, with Archer up 8% versus peers’ 24%, resulting in an improved relative valuation. The stock is trading at a 2023e EV/EBITDA of 4.7x versus peers at 7x. We reiterate our BUY and NOK1.5 target price.
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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