Valaris (Buy, TP: USD90.00) - Consensus gets a wake-up call
Following the Q4 call, we believe 2023e consensus adj. EBITDA needs to come down by at least c20%, with priced options too high, and weakness in the North Sea jackup market. We were already 24% below consensus 2023e adj. EBITDA, and have cut our estimate by 7% following the results. We are also 11% below consensus for 2024e, indicating further downside risk. Nonetheless, we still like the Valaris case, and see support from future earnings (2025+) and asset values; we reiterate our BUY and USD90 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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