Borr Drilling (Buy, TP: NOK35.00) - Two steps backwards
When benefitting from a premium valuation (we estimate USD127m per premium jack-up on the current share price on a fully invested basis) and high credibility from investors, there is no room for mishaps like the Qatar saga for Borr Drilling. Ultimately, we believe it will benefit from an improving jack-up market and be able to pull together the USD500m debt financing as well as other required financing during 2019/20 to bridge our estimated cash shortfall. At the same time, we can understand rising investor concerns on future contract prospects and financing. Still, we keep our NOK35 target price and BUY, but expect the stock to trade at a discount until it has rebuilt investor confidence.
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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