TGS (Buy, TP: NOK230.00) - Risk skewed to the upside
Based on its recent valuation multiples compression versus the unchanged multiples of its oil-service peers, investors’ confidence in consensus on TGS is low, in our view. Along with the recent share-price weakness, we believe this offers a compelling risk/reward, with the potential skewed to the upside. We maintain our 2024–2025 estimates, which are broadly in line with consensus and imply c10% YOY revenue growth on average, consistent with our view on offshore E&P spending. 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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