PGS (Sell, TP: NOK3.50) - Reality check
We still struggle to comprehend PGS’s steep valuation and see downside risk to 2023–2024 consensus with significantly lower YOY late-sales having a negative knock-on effect on free cash flow generation. While a debt refinancing seems imminent, this should be widely expected by now and thus we do not consider this a positive trigger to re-rate the stock. If anything, a successful refinancing should turn investor focus increasingly towards fundamentals, where tough comparables on late-sales in combination with a rise in costs and capex are set to weigh on FCF generation. We reiterate our SELL and NOK3.5 target price.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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