TGS (Hold, TP: NOK150.00) - Solid showing on its own merit
TGS continues to exceed our expectations, as the full Q3 results beat our forecasts on good cost control and higher-than-expected gross margins in its Acquisition business. Moreover, the cost-synergy potential from the PGS transaction was raised from >USD50m to cUSD100m. However, we cannot avoid factoring in the impact from PGS’s weaker-than-expected Q3 late sales and the soft outlook for Q4 fleet utilisation hitting the pro-forma combined estimates. We reiterate our HOLD, but have cut our target price to NOK150 (155).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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