Borr Drilling (Buy, TP: NOK110.00) - Moving closer to refinancing
With a neutral Q1 report, the highlight of its Q1 call was its accelerated efforts to execute a full refinancing, which could enable the return of capital to shareholders. For 2025, we estimate a cash flow yield to EV of 16–18% with day-rates of USD160k–170k for open capacity, which should allow for solid returns to shareholders of 13–25%, subject to the debt amortisation profile. As a refinancing could happen as early as H2, we believe it could trigger a rerating on dividend yield; thus, we have raised our target price to NOK110 (90) and reiterate our BUY.
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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