Equinor (Buy, TP: NOK450.00) - Set for strongest quarter ever
With gas prices ~80% higher QOQ in Q3, we expect Equinor to report its strongest ever quarterly results despite average oil prices dropping below USD100/bbl. We forecast adjusted EBIT of USD25bn and organic FCF of cUSD15bn, partly due to only one tax instalment being paid in Q3. Thus, its adjusted net cash position looks set to almost double to USD21bn. We reiterate our BUY but have cut our target price to NOK450 (525) on lowered gas price assumptions for 2023–2025e.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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