Shelf Drilling (Buy, TP: NOK100.00) - Good operational execution
We consider the Q3 operational performance to be solid, as EBITDA was 15% above our forecast and 26% above consensus. Following the earnings call and fleet update, we have cut our 2019 estimates to fully reflect expected downtime between contracts. Supported by high tendering activity and its geographical exposure, we remain optimistic that 2020 onwards will see better utilisation and pricing for Shelf Drilling and the jack-up industry. We reiterate our BUY and NOK100 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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