Continued to execute well in Q3

Still in a sweet position

Kongsberg Gruppen (Hold, TP: NOK1100.00) - Norwegian premium

We expect Q3 group EBITDA of NOK2.0bn, in line with consensus (results due at 07:00 CET on 24 October). We have raised our 2024–2026e EPS by 0–8% and our target price to NOK1,100 (970) following several large orders. However, we reiterate our HOLD, with the stock now trading at a 70-80% premium to its defence and maritime peers, as well as outperforming Saab by 40% since mid-June despite their similar growth prospects and earnings streams.

Edda Wind (Buy, TP: NOK30.00) - Well positioned

While EBITDA was broadly in line with expectations, the Q3 report gave early signs of improved operational reliability, which we believe will be key to narrowing the discount to underlying values (the stock is trading at 0.6x P/NAV). Recent contract awards (including a new 12+12-month contract announced with the results) have made the fleet fully booked until the 2025 summer season, and three of the four 2025 newbuild deliveries are now booked directly following yard delivery. We reiterate our BUY and NOK30 target price.

Valuation and market update

In this note, we show updated valuation and market statistics for the Offshore Drilling sector.

Petrobras FPSO delays may hit service volumes but lengthen cycle

Being the largest global consumer of deepwater oil services, Petrobras’ strategic plans tend to get investor attention. On the positive side, its latest 5-year plan sees 5% higher E&P spending than the previous one, and has a more stable phasing between the years, which is supportive for the cycle duration. However, several FPSOs are facing significant delays, which is on the downside for oil services, leading to delays for deepwater oilfield services (primarily drilling and subsea), likely resulting in lower ‘peak volumes’ and demand being spread over a longer period. The rig count is said to...