Equinor (Buy, TP: NOK430.00) - Higher taxes, less net cash build
Following Equinor’s Q3 trading update and NOK105bn extraordinary tax payment in the quarter, we have raised our cash tax estimates and lowered our FCF by 14% for 2022–2023e combined. We forecast Q3 adj. EBIT of USD24.2bn, a new quarterly record for Equinor by some way (results due at 07:00 CET on 28 October). We reiterate our BUY, but have cut our target price to NOK430 (450) as a result of our estimate changes and weaker than expected realised gas prices in Q3.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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