DNO (Hold, TP: NOK19.60) - Peshkabir success now reflected
We have downgraded DNO to HOLD (BUY) following the 16% rally in the share price since end-July, as well as a more balanced risk/reward with our view of a still-strong performance by Peshkabir already in our NAV. However, we have raised our target price to NOK19.6 (18.4) after including the Baeshiqa exploration prospect in our NAV and a further de-risking of Peshkabir. We welcome the company’s proposal to introduce dividends on the back of strong FCF generation.DNO is a Norwegian exploration and production company focused on the Middle East and North Africa. Co. holds stakes in oil and gas blocks in various stages of exploration, development and production, both onshore and offshore, in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland.
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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