Edda Wind (Buy, TP: NOK40.00) - Equity story unchanged
Q3 was below our expectation as costs increased on the chartered-in frontrunner in Germany. However, we see no material impact on our valuation as the frontrunner is expected to remain on the project only until early 2023, when the Edda Breeze newbuild is scheduled to take over. Pricing for its CSOV newbuild of low-EUR60m was largely as we expected given yard-price trends in recent quarters. We calculate an implied EV per vessel of EUR45m, representing a 20% discount at the EV level to our fair value of EUR56m per vessel. At the equity level, we see a larger discount as Edda Wind is trading at a P/NAV of 0.6x. We reiterate our BUY and NOK40 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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