TGS's first-quarter numbers were in line with what analysts expected. Earnings before depreciation and amortization (EBITDA) ended at $143 million, well above the result in the same period last year and four percent above the Bloomberg consensus, but the company still had to post a loss of $21 million before taxes. .
Steven Evgen of DNB Markets believes analysts will hold on to weaker forecasts going forward until consensus estimates are eventually cut. At the same time, he expects weaker utilization of boats coming from PGS, and therefore sees few reasons to buy TGS's share in the short term.
The rival buyout is still being processed by UK competition authorities and the second quarter is likely to be the first time TGS and PGS have provided figures as a combined company.
Evjen maintains a hold recommendation on TGS stock and cuts the price target to NOK 125 from NOK 130, according to an update to clients of the brokerage house. The previous closing price was NOK 123.
Interrupts course objectives
For its part, PGS had a weaker-than-expected performance as EBITDA was seven percent below the consensus compiled by the company itself.
Evjen calculates that the earthquake company will have negative underlying cash flow in 2024 and believes that the company's fleet utilization will be poor in the second quarter, due to, among other things, shipyard disruption.
They also point out that the Ramform Vanguard boat will likely be used for offshore wind work, contributing less to EBITDA than in the third quarter.
“We believe this will raise questions about demand for traditional seismic scanners,” the analysts wrote.
DNB Markets maintains the Hold recommendation on PGS as well, but lowers the price target to NOK 8.5. In comparison, the share price closed at NOK 8 on Wednesday.
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