DNO (Hold, TP: NOK7.50) - Payments aided by higher oil price
We forecast Q4 EBITDA of USD52m, 18% below consensus of USD63m, although we believe the deviation mainly could be due to delays in updating consensus after the production update. More importantly for the investment case, in our view, is the positive payment comments from Kurdistan, further helped by higher oil prices. This has prompted us to raise our target price to NOK7.5 (5), while we maintain our HOLD.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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