JPM expects offshore market to remain bright spot in 2025
11/12/2024 07:47
** J.P.Morgan expects the offshore services market strength
to persist in 2025, as it gives its outlook for the European
oilfield services (OFS) and exploration & production (E&P)
companies
** However, it says it sees a risk that low carbon budgets
could be reduced by around 20% in 2025-27, which may impact
companies with exposure to new energies
** Its top pick in OFS is "overweight"-rated Saipem
SPMI.MI , with the broker citing a record backlog and focus on
a consolidated offshore market
** It cuts Technip Energies TE.PA to "underweight" from
"neutral", as it sees LNG capacity additions slowing down
outside of the U.S. and expects increasing pressure on new
energies budget
** It also cuts Aker Solutions AKSOA.OL to "neutral" from
"overweight", lowering its PT by 34%, over concerns about the
management's decision to distribute 10 bln NOK dividend instead
of investing it in the underlying business
** In the E&P sector, its top pick is Var Energi VAR.OL
due to its expected free cash flow inflection as it exits its
investment period, supported by a solid balance sheet and capex
flexibility, maintaining a around 13% dividend yield
(Reporting by Anna Peverieri)
((Anna.peverieri@thomsonreuters.com))