Still the fittest in the room

Sats (Buy, TP: NOK26.00) - Working out nicely

The Q3 results were broadly in line with consensus, and SATS’ outlook was little changed. We reiterate our BUY as we still find the stock attractively valued, trading at a 2025 P/E of 11x on our estimates, and have raised our target price to NOK26 (25) on our slightly higher forecasts and peer group multiples. A reinstated dividend policy from H2 2025 (>50% of EPS), and scope for buybacks up to NOK500m are potential share-price catalysts.

Sats (Buy, TP: NOK25.00) - Q3 earnings in line with consensus

We consider this a mixed report for SATS, including adj. EBITDA in line with consensus, but a soft mix, with all countries except Denmark just below expectations, and a group membership base 5k below consensus. We expect only minor revisions to consensus following the report.

Edda Wind (Buy, TP: NOK30.00) - Well positioned

While EBITDA was broadly in line with expectations, the Q3 report gave early signs of improved operational reliability, which we believe will be key to narrowing the discount to underlying values (the stock is trading at 0.6x P/NAV). Recent contract awards (including a new 12+12-month contract announced with the results) have made the fleet fully booked until the 2025 summer season, and three of the four 2025 newbuild deliveries are now booked directly following yard delivery. We reiterate our BUY and NOK30 target price.

Valuation and market update

In this note, we show updated valuation and market statistics for the Offshore Drilling sector.

Petrobras FPSO delays may hit service volumes but lengthen cycle

Being the largest global consumer of deepwater oil services, Petrobras’ strategic plans tend to get investor attention. On the positive side, its latest 5-year plan sees 5% higher E&P spending than the previous one, and has a more stable phasing between the years, which is supportive for the cycle duration. However, several FPSOs are facing significant delays, which is on the downside for oil services, leading to delays for deepwater oilfield services (primarily drilling and subsea), likely resulting in lower ‘peak volumes’ and demand being spread over a longer period. The rig count is said to...