Valaris (Buy, TP: USD6.00) - Unrealistic consensus a challenge
Valaris looks well placed for multiple long-term contracts for its jackups and UDW floaters, and we expect upcoming dayrates to support our below-consensus estimates. However, we see a need for new liquidity in 2022, and that this and renegotiating debt maturities will be key to maintaining time optionality for the shares. As we see no near-term earnings support, but rather base our target price on NAV, we consider extended optionality and management execution key. We maintain our BUY, but have lowered our target price to USD6 (8) and see a potentially binary outcome for the stock.Ensco is an offshore contract drilling company engaged in providing offshore contract drilling services to the international oil and gas industry. As of Dec 31 2017, Co. owned and operated an offshore drilling rig fleet of 62 rigs. Co.'s rig fleet includes 12 drillships, 11 semisubmersible rigs, four moored semisubmersible rigs and 38 jackup rigs, including rigs under construction. Co.'s business consists of three operating segments: floaters, which includes its drillships and semisubmersible rigs; jackups; and other, which consists of management services on rigs owned by third-parties. Co.'s two reportable segments, floaters and jackups, provide one service, contract drilling.
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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