Kværner (Buy, TP: NOK19.00) - Uneventful Q3 expected
We are in line with consensus for Q3 (results due on 28 October with our EBITDA forecast of NOK99m. Order intake is likely to be soft (we forecast a book-to-bill of 0.4x), with potential upside from more work at Njord. Although 2019e is close to fully booked, the 2020 order book needs a top-up. With multiple contract opportunities and a solid balance sheet to help offset short-term concerns, we find Kværner attractively valued. We believe a ‘lower-forever’ valuation is reflected in the share price, which we find too bearish. We reiterate our BUY and NOK19 target price.Kvaerner is an industrial investment company, consisting of various operational and non-operational interests. Through its controlling interest in Aker ASA, Co. is engaged in providing services related to design, construction, maintenance, modification and operation of both large and small industrial facilities. The business spans a number of industries, including oil and gas upstream and downstream, process, pharmaceuticals, metals, power, chemical, pulping, environmental technologies and shipbuilding. Co.'s indirect activities in are divided into three business areas: Oil & Gas, Engineering & Construction and Shipbuilding.
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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