TGS (Buy, TP: NOK230.00) - Ready to reap the benefits
TGS’s Q4 sales outperformed peers, and were followed by significantly higher MultiClient investment guidance than we expected for 2023. We believe these positives, in combination with a successful integration of Magseis Fairfield’s OBN business, should lead to strong performance for the shares. Our new target price implies ~8x EV/EBIT on 2024e, assuming OBN pricing remains flat and a MultiClient sales-to-investment ratio of 1.9x, which we do not find particularly aggressive. We have upgraded TGS to BUY (HOLD) and raised our target price to NOK230 (150) due to our higher estimates.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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