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    DNO (OB:DNO): Assessing Valuation After New Exxon and Shell North Sea Offtake and Financing Deals

    Simply Wall St·12/25/2025 20:27:10
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    DNO (OB:DNO) just locked in a big piece of its future cash flow by placing all its North Sea oil with Exxon and Shell from January 2026, alongside up to USD 410 million in offtake financing.

    See our latest analysis for DNO.

    The deal lands at a time when DNO’s momentum is already strong, with the latest share price at NOK 15.4 and a robust year to date share price return of 38.7 percent, supported by a striking 1 year total shareholder return of around 71 percent. This suggests investors are increasingly pricing in growth and reduced risk around its North Sea strategy.

    If this kind of cash flow visibility appeals to you, it could be worth exploring other energy names through aerospace and defense stocks as potential beneficiaries of similar long term demand trends.

    Yet even with this newfound cash flow certainty, DNO still trades at roughly a 20 percent discount to analyst targets. This raises a key question: is this a genuine buying opportunity, or is the market already pricing in future growth?

    Most Popular Narrative Narrative: 16.8% Undervalued

    Against a last close of NOK 15.4, the most followed narrative anchors on a fair value of NOK 18.50, framing DNO as materially mispriced with upside potential.

    The analysts have a consensus price target of NOK17.0 for DNO based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK19.0, and the most bearish reporting a price target of just NOK14.0.

    Read the complete narrative.

    Want to see what powers this upside view? The narrative leans on rapid top line expansion, a swing to healthy margins, and a surprisingly low implied earnings multiple. Curious which forecasts really move the needle here and how they justify that valuation leap? Explore the details to unpack the full earnings and cash flow roadmap behind this target.

    Result: Fair Value of NOK 18.50 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this upside story could quickly unravel if disruptions in Kurdistan intensify or if higher leverage from the Sval Energi deal reduces cash flows.

    Find out about the key risks to this DNO narrative.

    Build Your Own DNO Narrative

    If you see the story differently or want to dig into the numbers yourself, you can build a personalised view in just a few minutes using Do it your way.

    A great starting point for your DNO research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

    Looking for more investment ideas?

    Before you move on, consider building a more focused shortlist of opportunities by using targeted screeners that surface quality stocks most investors overlook until it is too late.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.