PGS (Hold, TP: NOK8.80) - Solid start to the year
PGS reported strong Q1 revenues of USD223m, primarily driven by stronger-than-expected contract revenues and late sales. A higher vessel allocation towards contract as opposed to MultiClient explained most of the deviation from our contract revenues, leaving implied dayrates broadly in line with expectations, mirroring a flattish sequential quarterly trend. Due to the contemplated merger with TGS scheduled to close in late-Q2, we continue to peg our PGS target price to our TGS target price and the corresponding merger exchange ratio. Thus, we reiterate our HOLD but have raised our target price to NOK8.80 (8.20) due to a higher TGS target price driven by higher pro forma combined estimates for the merged TGS/PGS entity.Petroleum Geo-Services is engaged in providing geophysical services and oil and gas production services. As of Dec. 31, 2001, Co. operated six Ramform design vessels in its marine seismic data acquisition operations.
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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