Seadrill (Buy, TP: NOK450.00) - Overlooked for too long
Following the relisting post Chapter-11, Seadrill shares are yet to benefit from improvements in the offshore drilling industry. We believe this is primarily due to low trading volumes, as ex-creditors are yet to sell a meaningful number of shares. Also, news flow has been limited. With the Q2 report (31 August), we expect to get updates on potential new contracts and the company’s strategy ahead. We believe the valuation reflects a liquidity discount that will persist until the shareholder base starts transitioning. Nevertheless, we consider the current P/NAV of 0.49x and 2024e EV/EBITDA of 3.0x highly attractive and reiterate BUY and NOK450 target price.
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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