Northern Drilling (Buy, TP: NOK72.00) - Solid asset value support
With a USD455m implied value for each of its two high-spec harsh environment semis, Northern Drilling is trading at a discount to recent second-hand transactions and our implied value for Awilco Drilling. Given a proactive main shareholder (Mr Fredriksen) with a solid track record coupled with an opportunistic strategy, we consider the discount unwarranted. We maintain our BUY recommendation and have raised our target price to NOK72 (NOK65) to fully reflect the most recent second-hand transactions for similar rigs.
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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