Borr Drilling (Buy, TP: NOK110.00) - Investor focus on liquidity
Our best-effort like-for-like comparison suggests Q3 reported EBITDA of cUSD6m, just below our USD11m forecast. There are several ways the company could improve its 2020 liquidity, so we believe this is manageable. However, as long as investors are laser-focused on offshore drillers’ leverage and liquidity, we expect the share price to be capped. Jack-up market fundamentals continue to improve and the company is having contracting success, but for investors this appears secondary to clearing the liquidity runway. We reiterate our BUY and NOK110 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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