Strategic financial statement analysis and valuation of Aker solutions ASA

Abstract

The purpose of this paper is to estimate the fair value of Aker Solutions ASA per 31.05.2017. The fair value is held up against the market price to make a recommendation as to what investment strategy an external, well-diversified investor should follow. The strategic analysis concludes that Aker Solutions has a potential strategic advantage in the longer term, but faces strong challenges in the market in the short term. A fundamental valuation by a DCF approach is used as the main technique for estimating the fair value. The valuation is supplemented by a multiple analysis. The fundamental valuation gives an estimate per 31.05.2017 of 43,05 NOK/share. It is supported by the relative valuation of 53,74 NOK/share. Per 31.05.2017 the shares are traded at a discount relative to fair value of 3,4%. Given the uncertainty in the estimates, a neutral investment strategy is recommended. The conclusion is that an investor should hold shares of Aker Solutions ASA.