BW LPG (Buy, TP: NOK75.00) - Support from propane prices
BW LPG is trading at a 40% discount to steel values, which we continue to find unwarranted. Accordingly, we reiterate our BUY, but have reduced our target price to NOK75 (79), as we now believe the discount should be 15%, in line with the 2018–2020 average. We have raised our 2021–2023e EBITDA estimates by 5% on average, primarily driven by increased fuel savings from the LPG propulsion capabilities (10 vessels on water, 15 by end-2022e).
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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