BW LPG (Buy, TP: NOK110.00) - Value set to be unlocked
Following the Q2 report, we have lowered our near-term estimates due to the Q3 guidance and, thus, reduced our 2022e adj. EBITDA by 5%. However, we find meaningful upside potential after what we view as an unwarranted c12% sell-off following the Q2 report. BW LPG is now trading at an EV/GAV of 0.64x, implying a 5-year-old VLGC value of ~USD47m versus the latest quote of USD73m. We find the company overly discounted, despite consistently delivering shareholder value with a constructive sector backdrop. We reiterate our BUY and have raised our target price to NOK110 (108).
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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