Borr Drilling (No_rec, TP: NOK) - Treading a thin (liquidity) line
While we subscribe to the view of a (slightly) improving jackup market, management expectations of putting all delivered rigs (23) to work in 2022 look optimistic to us. Regardless of how many rigs it puts to work, we consider the near-term liquidity situation pressing, and the Q2 results provided no relief. Hence, on our view of a need for a capital injection late-2021/early-2022, high debt level and a valuation well above peers, we still see a risk the current equity eventually will be marginalised. We have no recommendation or target price on Borr Drilling.
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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