DHT Holdings Minor model adjustments
We have updated our estimates following DHT’s Q3 results. The guidance implies achieved spot rates ~50% above benchmark rates since its business update, reflecting solid performance in weak markets. We remain positive on the tanker outlook, with modest ~3% deliveries next year (<1% for VLCCs). Further, we see potential positive effects from OPEC unwinding production cuts; tighter Iranian sanctions under the Trump administration leading other Middle Eastern producers to fill the supply gap; and demand and refinery growth set to be driven by Asia, a region structurally short on crude. Thus, we believe fundamentals are strong, with attractive upside optionality for tankers, and VLCCs in particular. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have raised our target price from USD14.2 to USD14.3.
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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