Elkem (Buy, TP: NOK50.00) - Repricing potential in specialities
We consider the current consensus (EBITDA down 12% YOY in 2019e) conservative as it does not seem to reflect the strong upside potential in specialty silicones or limited capacity expansion in the next two years. We are also slightly ahead of consensus in Q3 (due at 7:00 CET on 24 October). With 15% FCF yield and strong dividend potential, we reiterate our BUY recommendation and our NOK50 target price.Elk Petroleum is engaged in developing enhanced oil recovery (EOR) projects. Co.'s activities consist of the development of a CO2 EOR project at the Grieve oil field in Wyoming, U.S., continuation of operations at the Singleton Unit in Nebraska for future implementation of an EOR project, and via its acquisition of the Singleton South oil field in Nebraska, the development of potential by-passed oil pool on the southern flank of the Singleton Unit. Co. has two operating segments: Australia, which comprises the corporate head office function; and the U.S., which comprises administration, production, exploration, evaluation and development of oil and gas fields and ownership of pipelines.
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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