Maersk Drilling (Buy, TP: DKK600.00) - Unique, but conservative
We welcome Maersk Drilling’s clarity on future capital returns to shareholders, but consider it conservative and slightly disappointing that no dividends will be paid for now. Based on its target leverage and our 2020 forecast, we see potential for a c8% yield on its current market cap, rising to c18% for 2021. Its cash return potential is truly unique among the offshore drillers, which combined with attractive asset valuations makes us reiterate our BUY and DKK600 target price.
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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