离岸更新:将OII、RIG、DO调整为增持DRQ调整为持有.docx
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1、FOCUS7?喑拍店获* IWO 6Z0 q+o,pos国一工 o SZ0 .6 ;-s+oz-u3Equity Research 20February2019INDUSTRY UPDATENorth America Oilfield Services & EquipmentNEUTRALUnchangedFor a full list of our ratings, price target and earnings changesinthis report, please see table on page 2.North America Oilfield Services & Equip
2、mentJ. David Anderson, CFA+ 1 212 526 4016BCI, USEdward Kim+ 1 212 526 9920BCI, USDerek Podhaizer+ 1 212 526 6368BCI, USRobert Arancio+ 1 212 526 7604BCI, US市 BARCIAYSOffshore UpdateToes Back in the Water; UpgradingOil, RIG, DO to OW, DRQto EWIfs been a while since weve recommended owning the offsho
3、re oilfield service names, but after almost 5 years of a downturn, a transformed offshore industry is starting to emerge and along with it, a number of opportunities in OFS. We expect 2019tobeatransitionyearwith2020settinguptobethestart of a multi-yeargrowth trajectory; however, this offshore cycle
4、will look very different from the last. No part of OFS has been more structurally impacted from the downturn than offshore, as equipment standardization, design simplification and phased-developments have dramatically lowered project break-evens. The good news is were optimistic for more greenfield
5、FIDs this year. the bad news is the next offshore capex peak (2023/25?) could be 20-30% below the last peak (2013/14), In this note, we highlight many signs of offshore markets starting to improve including order trends, seismic activity on the upswing (pricing up 35% this year) and higher explorati
6、on budgets. Dont get us wrong -theres still plenty to worry about (detailed in our offshore bull/bear investment case) butforthefirsttime in years, were leaning moretoward the bull case and along with it upgrade Transocean, Oceaneering and Diamond Offshore to Overweight.Offshore Services & Equipment
7、: ordersand activity poised toinflectoverthe nextl 2 months. We believethis is oneofthe betterpositioned verticalsin OFSgiven business differentiation (no two companies exactly the same) and high barriers to entry with fewercompetitors compared to otherOFS markets. We expect book-to-bill ratios to i
8、mprove over the back half of the year as these companies will be the direct beneficiaries of greenfield offshore projects moving ahead (in addition to the steady stream of smaller brownfield / subsea tiebacks). We upgrade Oceaneering to OW and Dril-Quip to EW (but keep TechnipFMC at EW despite valua
9、tion upside).Offshore Drillers: still cautious on the group but the worst has passed. Our rig-by-rig DCF valuation methodology has been our guide, the primary reason for our negative view on the offshore drillers the past 5 years (we had UW-ratings on all 5 names). Though still plagued by oversupply
10、 (125 contracted floaters today vs. supply of over 200), quality of fleet will be the defining characteristic as higher-spec rigs will not only be the first to go back to work but be able to command premium day rates going forward. We upgrade both Transocean and Diamond Offshore to OW (from UW).Schl
11、umberger and Tenaris will also benefit from an improved offshore market. Among large-caps (excluding FTI), SLB and TS have the most offshore exposure, currently representing 20% of revenue. This isthe most lucrative market for both companies as offshore operations demand the highest level oftechnolo
12、gy, quality, and execution, whichtranslatesintohigherpricing, margins, and returns.Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may havea conflict of interestthatc
13、ould affect the objectivity of this report. Investors should considerthis report as only a single factor in making their investment decision.PLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 40.FIGURE 10Oll/DRQ/Flare atthe lower-end of offshore peers in terms of market
14、cap($bn)70 -i 62.2FIGURE 11Oll/DRQ/Flare atthe bottom of offshore peers in terms of overall 2019E companywide EBITDA (consensus)($mm)Source: Refinitiv (market cap as of 2/15/19)Source: Refinitiv (consensus 2019 EBITDA as of 2/15/19)It should come as no big surprise that these 3 companies were among
15、the hardest hit during the downturn, with EBITDA plummeting from 2014-2018, with 2018 likely marking the bottom in EBITDA for Oil and DRQ (Figure 12).Valuation isa challenge.we use historical multiples on 2021 EBITDA(our id-cyclestimatejandthefloaterrigcount/subseatreesasa guideHow do you value comp
16、anies whose EBITDA is at cyclical lows and near breakeven levels in the case of DRQ and FI? Because these companies are at or near the trough in earnings, we apply EBITDA multiples to our 2021 estimates which we believe is close to mid-cycle (assuming offshore peaks in the 2023-2025 timeframe) and t
17、hen use ratios of EBITDA/subsea tree and EBITDA/contracted floater as a sense-check/guide. Though our 2021 estimates (Figure 12) for Oil, FI, DRQ may appear optimistic, we note that they representjust 33-36% ofthecompanies7respective peak-2014 EBITDA (Figure 13).FIGURE 12OIL DRQ, Fl - EBITDA ($mm)So
18、urce: Company Reports, Barclays ResearchFIGURE 13OIL DRQ Fl - % of peak 2014 EBITDASource: Company Reports, Barclays ResearchAlso, viewed from the perspective ofthe ratio of EBITDA to a) the # of subsea trees awarded and b) our forecasted contracted floating rig count (Figure 14 and Figure 15, respe
19、ctively), the ratios in the outeryearsare still much lowerthanthey have been historically.FIGURE 14EBITDA(company-specific metric) persubsea tree awarded(industry metric)FIGURE 15EBITDA (company-specific metric) per contracted floater(industry metric)($mm)Oil DRQ FISource: CompanyReportsand Barclays
20、 ResearchforEBITDA, Wood Mackenzie forglobal subsea trees awarded (both historical and forecast)Oil DRQ FISource: CompanyReportsand Barclays ResearchforEBITDA, Wood Mackenzie forglobal subsea trees awarded (both historical and forecast)011 DRQ FISource: Company Reports and Barclays Research for EBIT
21、DA, IHS-Petrodata and Barclays Research for contracted floatersNote: The contracted floaterrig count from 2018-2021on which the ratios above are based reflects a 35% upward adjustment to account for rig efficienciesOceaneering (OH) - Upgrade to OW (from UW) at $19 PT (from $18)Oceaneering has a broa
22、d portfolio of products and services that doesnt compete directly againstthe big subsea players. It is the market leader in ROVs for drill support, has a suite of various manufactured products and subsea intervention service offerings in its Subsea Products segment and owns a fleet of 3 Jones-Act ve
23、ssels (including the Ocean Evolution f to be delivered 2Q19) and charters several others to support its Subsea Projects segment. Its only non-Energy segment, Advanced Technologies, despite being the smallest segment historically posted the highest EBIT of any of Oils segments in 2018 ($38mm), and is
24、 expected to trend higherthis yearon higher demand/activity in the entertainment business and improvements in AGV operations (automated guided vehicles), We value Oceaneering at 7.5x our 2021E EBITDA of $313mm (36% of peak-2014 levels) and increase our PT to $19 (from $18) which represents 17% upsid
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