TGS (Buy, TP: NOK145.00) - The proof is in the pudding
TGS looks set for a strong start to 2025 following recent contract awards potentially pushing vessel utilisation above 80% for Q1e. We also see room for it to optimise vessel utilisation with a higher share of MultiClient work in Q2–Q3, possibly extending the high vessel utilisation through the year, and effectively removing a key investor concern. We have raised our vessel utilisation assumptions, and in turn, our 2025e EBITDA by 5%, seeing ~USD300m in FCF for 2025–2026e, despite a 4% YOY decline in late-sales. We reiterate our BUY and have raised our target price to NOK145 (130).TGS Nopec Geophysical provides geoscience data to oil and gas exploration and production companies worldwide. In addition to global geophysical and geological data libraries that include seismic data, magnetic and gravity data, digital well logs, production data and directional surveys, Co. also provides advanced processing and imaging services, interpretation products, permanent reservoir monitoring and data integration solutions.
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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