OKEA (Hold, TP: NOK26.00) - Fairly valued
OKEA stock is trading ~20% above the trough levels of mid-February, and we consider it fairly valued with limited upside from our target price. Impairments from the recently closed Statfjord transaction should still be fresh in investors’ mind, and we consider a discount to our NAV appropriate as the company remains restricted from distributing dividends for 2024. We have lowered our gas price assumptions, prompting 4–5% cuts to our 2024–2026e EBITDA. Following the recent strength, we have downgraded OKEA to HOLD (BUY) and reiterate our NOK26 target price, implying a 20% discount to NAV.Okea ASA is a Norway-based oil company engaged in the oil and gas exploration and production industry. The Company contributes to the value creation on the Norwegian continental shelf with development and operation systems through the utilization of the result of previous and ongoing exploration activities in order to bring undeveloped oil on stream in strategic cooperation with service companies. Its services do not involve the exploration for petroleum. The Company operates an office in Trondheim, Norway.
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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