Paratus Energy Services is a holding company with offshore energy-services interests — jackup drilling, subsea (Seabras-Sapura) and Fontis — benefiting from the current offshore upcycle, with a high free-cash yield (25.6%). It is classified as a financial but is really a leveraged operating/holding company.
The reported numbers are distorted by the holding structure (an EBIT margin above 100% reflects associate/equity income, not operating margin), so the +148% reverse-DCF is an artifact, not a target. The market's own implied growth is negative — it prices a normalisation of the offshore cycle.
The reverse-DCF is unreliable here (holding-structure accounting). The honest read is a leveraged, cyclical offshore-services holding at high current cash flow, with net debt (NOK 5.1B) and offshore cyclicality the key variables; sum-of-the-parts on the underlying stakes is the right frame.
Base NOK 50 (flat) on high current cash flow; bull NOK 75 (offshore upcycle + holdings perform + deleveraging); bear NOK 32 (offshore downturn exposes the leverage).
The market pays today’s enterprise value for roughly -10.0% NOPAT growth over 5 years. The business earns 18% on capital against a 8% cost of capital (spread +9.9 pp); the no-growth value is NOK 74/share (158% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 75 | +0% | +59% | 30% | Offshore upcycle + holdings perform + deleveraging |
| Base | NOK 50 | -9% | +6% | 40% | High current cash flow; cyclical holding |
| Bear | NOK 32 | -17% | -32% | 30% | Offshore downturn exposes leverage |
| Prob-weighted | NOK 52 | — | +11% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 113 | 128 | 139 | 158 | 171 | 207 |
| 7.25% | 90 | 103 | 111 | 126 | 136 | 163 |
| 8.00% (base) | 74 | 84 | 91 | 102 | 110 | 132 |
| 8.75% | 62 | 70 | 76 | 85 | 91 | 108 |
| 9.50% | 52 | 59 | 64 | 71 | 76 | 90 |
Green = fair value above the current price of NOK 47.05. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
High current free cash flow (25.6% yield) from the offshore-services upcycle.
Jackup, subsea and Fontis interests diversify exposure.
Cash generation could reduce the NOK 5.1B net debt and transfer value to equity.
Underlying stake values may exceed the consolidated read.
High cash flow supports distributions while the cycle holds.
Paratus is a leveraged offshore energy-services holding at high current cash flow, but its dataset is structure-distorted and the market prices a cyclical normalisation. HOLD, low conviction; base target NOK 50 (flat), sized small for the structure/cyclicality uncertainty.
An offshore upcycle plus deleveraging is the upside; cyclicality, leverage and measurement opacity are the cautions.