TGS (Buy, TP: NOK230.00) - All eyes on Q2
Following a soft revenue update in April, we consider TGS’s full Q1 report uneventful, as the underlying results were in line with our expectation and consensus. On a positive note, the Magseis Fairfield acquisition seems to be bearing fruit, with positive EBIT and FCF already in the first full quarter. Going forward, we believe investors’ primary focus will be on Q2 late-sales, where the revenue levels should shed light on whether the soft Q1 late-sales were just a bump in the road or a sign of structural weakness. Nevertheless, despite our below-consensus view on late-sales, we continue to see attractive risk/reward in TGS as 2024e multiples remain meaningfully below historical levels. We reiterate our BUY and NOK230 target price.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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