viccie schreef:
Kempen 17/10:
Conclusion
We favour Fugro (Buy, price target €65) as one of our top picks in oil services. Fugro
is active in the complete oil services cycle from the start with seismic surveys up to the
depletion of oil/gas facilities. With market shares in offshore geotechnical and offshore
survey of 60-80%, Fugro is THE oil services play which in our view will continue to
benefit from the upturn in investments and moreover from the increasing dependency
from NOC’s on the know-how of service companies. Visibility in Fugro’s order book is
better than ever and we expect Fugro is well positioned to surprise the market in
earnings momentum. We estimate 2007-2008 EBIT margins of 17.9% and 18.7%.
We expect Fugro will continue to expand its margins, supported by a very strong order
book and because clients are willing to secure Fugro’s capacity and services at a much
earlier stage than we have seen in recent years. We expect ROI’s, not only on new
capacity and vessels that will become operational during 4Q2006-3Q2008, to be
significantly higher than the 15% the we regard as achievable in normal market
conditions. The investments in new capacity (survey and seismic vessels, ROV’s and
other equipment) will also have a positive impact on efficiency and utilization rates,
which we believe will also be a major driver for margins as from 2007. The last of the
ten new vessels will be delivered in 3Q2008 so the positive impact will even be visible
into 2009. Our 2007-2008E net profit is 12% and 14% ahead of consensus estimates
and we believe Fugro is very well positioned to continue to surprise the market
positively with its earnings. Fugro is valued at 2008E P/E of 15.5x vs. Schlumberger’s
P/E of 21.9x and at CGG-Veritas’ P/E of 16.2x, although this is a pure seismic player.