TGS (Hold, TP: NOK125.00) - Vessel utilisation set to disappoint
We are broadly in line with company-compiled consensus for TGS ahead of its Q2 revenue update. However, following the recently closed merger with PGS, we see meaningful downside risk to consensus revenue estimates related to the latter, where we are 24% below the most recent company-compiled consensus. We believe vessel revenue expectations remain too high as consensus appears to keep overestimating utilisation, which is set to disappoint for Q2, leaving downside risk to combined 2024 estimates. We reiterate our HOLD and NOK125 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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