BW LPG (Buy, TP: NOK108.00) - Continued discount
Ahead of the Q2 results (prior to open on 29 August), we have raised our 2022e EBITDA by 7%, to USD362m, on positive market trends and updated fuel spreads. However, BW LPG is falling behind its peers on EV/GAV, trading at an EV/GAV of 0.62x compared to its peers at c0.75x. We find the discount unwarranted, as we expect US LPG exports to paint a positive picture for 2023. Consequently, we believe the discount could unlock meaningful upside potential to our still-positive market outlook. We reiterate our BUY and have raised our target price to NOK108 (104).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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