Valaris (Buy, TP: USD95.00) - Focus remains on 2025 onwards
We see the Q2 report as a non-event, with EBITDA around breakeven (we estimate USD2m). From a contract perspective, we believe Valaris is well placed to secure more work on its near-term available UDW rigs, in particular DS-15 and DS-4 in Brazil, while the North Sea jackup market remains challenging. We like the stock on asset valuation and earnings multiples for 2025e onwards, while we are a bit concerned about a too-high consensus for 2024–2025. We reiterate our BUY and USD95 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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