Subsea 7 (Hold, TP: NOK87.00) - Tailwind from strategic move
As Subsea7 was previously reserved with respect to a potential business separation, favoured an asset-light model in offshore wind, and was not focused on turbine installation, initial investor commentary suggests that its merger with OHT caught some by surprise. We like the deal from a strategic and financial perspective, as we have viewed the asset-light strategy as a potential risk. Also, we believe turbine installation could emerge as a sweet spot in the offshore wind. As the company has crystalised the value in offshore wind and reduced other near-term risks, we have upgraded to HOLD (SELL) and raised our target price to NOK87 (80).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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