Valaris (Buy, TP: USD52.00) - Retirements and jackup backlog
The recently announced fleet retirements are positive but mainly serve as a signal, in our view, with the impact on supply/demand limited as the rigs (except DPS-5) were not being actively marketed. The fleet status report (FSR) contained several jackup extensions but limited news on the UDW fleet. While there is uncertainty for some rigs, we believe several could pick up work starting in mid-2026, helping to build 2027 visibility. Hence, the cash flow story remains on the horizon, with improvements key to help close the NAV gap and for intrinsic value to crystallise. We reiterate our BUY and USD52 target price.
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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