Odfjell Drilling (Buy, TP: NOK65.00) - Still standing out
As a preferred contractor for Aker BP and Equinor, Odfjell Drilling is uniquely placed in Norway, with industry-leading backlog coverage and earnings visibility. We are 8% above consensus on Q4e EBITDA, and it is one of the few offshore drillers where we are above consensus for 2024–2026e. We see solid execution, greater comfort in terms of the 5-year surveys, and wider appreciation of its attractive valuation as key to a stock re-rating. Adjusted for dividend payments, the stock is trading at a 2024e EV/EBITDA of 4.3x, and 2.7–1.8x for 2025–2026e. We reiterate our BUY and NOK65 target price.Odfjell Drilling Ltd. (Odfjell Drilling) is an integrated offshore drilling and oil service company. The Company operates through three segments: Mobile Offshore Drilling Units (MODU), Drilling & Technology, and Well Services. The Mobile Offshore Drilling Units is responsible for operations of mobile drilling units fully or partly owned by the Company and units owned by other companies. It operates mobile drilling units in Norway, United Kingdom, Angola, Vietnam and Brazil. The Drilling & Technology segment is providing platform drilling, project management and engineering services. Drilling & Technology operates from offices in Bergen, Stavanger and Aberdeen. The Well Services segment is a provider of casing and tubing running services (TRS), drill tool rental and well intervention services to the onshore and offshore oil and gas industry. The Well Services are provided to onshore and offshore drilling operations in the North Sea, mainland Europe and Black Sea, among others.
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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