Equinor (Buy, TP: NOK400.00) - At a crossroads
By end-2023, we estimate Equinor will have USD35bn in excess distribution capacity beyond its guided capex and ~USD10bn in annual payouts. While investors seem concerned about falling capital discipline, we conclude that inorganic renewables growth should be out of the question. Measured by net carbon-intensity reduction, inorganic growth looks 23–73% more expensive than organic, depending on the acquisition premium. We find the risk/reward favourable ahead of Q2, with raised shareholder distributions a share price trigger and relief, and reiterate our BUY and NOK400 target price.Equinor is engaged in oil and gas exploration and production activities. Co. is primarily focused on exploration, development and production of oil and gas on the Norwegian continental shelf (NCS). Co.'s operations are organized into four segments. The Development and Production Norway and Development and Production International segments explore, develop, produce and extract crude oil, natural gas and natural gas liquids. The Marketing, Processing and Renewable Energy segment markets, trades, transports and processes oil and natural gas and renewable energy. The Other segment consists of global well and project delivery, research and develpoment, and business development.
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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