Statoil (Buy, TP: NOK205.00) - In line with Q1e consensus
We are only 2% above consensus Q1e adj. EBIT (results due at 07:00 CET on 25 April). We expect production growth of 0.9% YOY, driven by Statoil’s gas production, and strong organic FCF (we forecast USD0.76, or NOK5.9 per share). The Statoil investment case is all about FCF generation in our view, with the cost base re-set and oil prices at USD73/bbl; we estimate 2018–2020e average annual FCF of USD2.64/share, implying it is trading at a P/FCF of 9.7x. We have made only minor estimate changes, and we reiterate our BUY and NOK205 target priceEquinor is engaged in oil and gas exploration and production activities. Co. is primarily focused on exploration, development and production of oil and gas on the Norwegian continental shelf (NCS). Co.'s operations are organized into four segments. The Development and Production Norway and Development and Production International segments explore, develop, produce and extract crude oil, natural gas and natural gas liquids. The Marketing, Processing and Renewable Energy segment markets, trades, transports and processes oil and natural gas and renewable energy. The Other segment consists of global well and project delivery, research and develpoment, and business development.
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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