DnB Markets - Valaris PLC Class A (E65F) Valaris (Buy, TP: USD8.00) - Consensus remains too high

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DnB Markets

Martin Huseby Karlsen

EUR 92.48 For Business Accounts Only

Valaris (Buy, TP: USD8.00) - Consensus remains too high

With most contracts in its fleet status report being announced earlier or widely expected, it was mostly changes to duration, start dates and gaps driving our estimate changes. 2020e EBITDA is lowered by 9% to USD265m while there are limited changes on our 2021e EBITDA. Going forward, we consider Valaris well placed on multiple new long-term contract jobs for floaters with dayrates around the USD250k level or below. We also see it as well placed to add jackups long-term. We reiterate BUY and a USD8 target price.

14/02/2020 12 EN

Underlying

Valaris PLC Class A

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.

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GB00B4VLR192 Frankfurt Stock Exchange United Kingdom

Provider

DnB Markets

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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Analysts

Martin Huseby Karlsen

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Valaris (Buy, TP: USD8.00) - Consensus remains too high

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Monthly LMI Update Independent Investment Research

Valmet (Buy, TP: EUR30.00) - Q1 on the weak side

Komplett (Hold, TP: NOK10.00) - Challenging market set to persist

XXL ASA (No_rec, TP: NOK) - Weak Q1, but better than forecast

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