Energy Morning - 28 April 2025

Muted 2025 growth expectations

Following Q1 earnings calls by some of the oil service companies, 2025 outlooks appear more challenging than previously. Baker Hughes expects international upstream spending to decline by mid- to high-single digits, while Halliburton sees its international revenues flat to slightly down. Furthermore, Weatherford expects 2025 international revenue to decline by low double- to mid-double digits. Precision Drilling flagged additional rig suspensions by Saudi Aramco, and SLB highlighted a slow start...

Trelleborg (Hold, TP: SEK360.00) - Limited signs of demand weakness

Q1 adj. EBITA was bang in line with consensus and our estimates. Management guided for unchanged demand QOQ in Q2 after factoring in macro uncertainty, although recent order intake suggests to us a stronger quarter. We have lowered our 2025–2027e adj. EBITA by c2% on average (partly due to weakening FX) and cut our target price to SEK360 (390); however, with a balanced risk/reward, in our view, we reiterate our HOLD.

Steady as she goes

ENI capex cut but maintains shareholder returns

Driven by macro headwinds and uncertainty around trade tariffs, ENI was the first large oil company to introduce capex cuts for 2025, contributing to a more challenging business environment for oil services. Over the past five years, we estimate ENI to have been the oil major with strongest offshore spending growth, and it has been considered active and opportunistic while others have been more conservative. Hence, we see its reduction as a soft datapoint for oil services. ENI has optimised its ...

In-line report, stable demand into Q2

The Capital Goods Data Miner - April 2025

Q1 was OK but that's ancient history now

A relative outperformer among short-cyclicals

E&P spending sensitivity explored

With an oil price at the mid-USD60s/bbl level, focus on the oil major overspending situation, and resulting impact on the outlook for offshore-focused oil services, is set to increase further. While oil companies would likely cut, or even eliminate, buyback programmes first, we expect increased focus on spending reductions and efficiencies, creating a more challenging business environment for oil services. Hence, we see a risk of oil companies taking a more cautious approach, resulting in projec...

Crude Quarterly Q1'25: weaker oil market fundamentals

Trelleborg (Hold, TP: SEK390.00) - FX headwinds

We estimate Q1 sales of SEK8,905m, organic growth of c1% YOY and adj. EBITA of SEK1,638m (4% below consensus). We expect a neutral outlook from management with regards to Q2, and have lowered our 2025–2027e adj. EBITA by c8% on average (mainly due to FX but also reduced demand estimates). We reiterate our HOLD but have lowered our target price to SEK390 (435) on updated valuation and estimates.

Germany: Investing its way back to growth

In a mid-cycle plateau

Following recent updates from E&P companies, we have reduced our 2025 offshore spending estimate to 0.5% (from c3% earlier this year). This is driven by a combination of actual 2024 spending being higher than expected (8% versus 4% previously), creating tougher comparables and a reduction in spending plans from Pemex in 2025. Despite growth flattening out, we still see the cycle building in duration, with execution of deepwater developments remaining on the agenda, albeit with a delayed executio...

The Capital Goods Data Miner - March 2025 (republished)

Set for spicy growth

Our recent field trip to India (visiting Volvo, Epiroc, Trelleborg, Autoliv and others) alongside our analysis suggests the country is set to take centre stage as a global manufacturing hub over the coming decade, shifting from being the sixth- to the third-largest end-market for the Swedish Industrial sector. India’s strong economic growth trajectory and favourable demographics mean the companies: 1) see double-digit growth as sustainable; 2) are pursuing manufacturing capacity expansions; and ...

Energy Morning - 4 March 2025

Archer taking aim at yield

Energy Morning - 27 February 2025

Energy Morning - 24 February 2025