DOF Group (Buy, TP: NOK70.00) - Deleveraging underway
The main highlights from its Q3 report were its improved cashflow (c80% FCF conversion) and EBITDA beat due to continued strong performance in subsea. No guidance was given for 2024, while it reiterated its view on contract coverage, implying ~NOK14bn revenues next year (management reporting). The ongoing PLSV tender in Brazil will be key to watch as it could provide attractive repricing opportunities and visibility to 2025 and beyond. The shares are trading at a 2024e EV/EBITDA of 4.0x. We reiterate our BUY and NOK70 target price.
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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