Subsea 7 (Buy, TP: NOK80.00) - More insulated than peers
Compared to other oil service names, Subsea 7 keeps executing well and in our view recent company-specific events have helped it too. First, the ongoing excitement in the capital markets over renewables is likely to result in a higher multiple for this segment. Second, our concern over the PLSVs in Brazil has been pushed out in time thanks to its blend-and-extend agreement, and we believe the wider market will not fully focus on the PLSVs for the next 6–12 months. Hence, we now see forward estimates being more shielded from negative revisions near-term, and have upgraded to BUY (HOLD), with a target price of NOK80 (65).Subsea 7 is a provider of seabed-to-surface engineering, construction and services contractor to the offshore energy industry. Co. provides products and services required for subsea field development, including project management, design and engineering, procurement, fabrication, survey, installation, and commissioning of production facilities on the seabed and the tie-back of these facilities to fixed or floating platforms or to the shore. Co. also provides products and capabilities to deliver full Life of Field services to its clients. Through its i-Tech Division, Co. provides remotely operated vehicles and tooling services to support exploration, production and drilling activities.
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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