Dorian LPG (Buy, TP: USD36.00) - Solid outlook attractively valued
We believe the risk/reward in Dorian LPG screens attractively on solid market prospects, with limited 4% annualised deliveries for the next six quarters, and demand growth support from close to a 40% increase in US terminal capacity by 2026. Thus, we see potential for a tight market, and shipowners to capture its historical share of the arbitrage, currently implying USD60k/day for 2025e. Applying this as our spot rate estimate results in a 23% earnings yield for 2025e. We reiterate our BUY but have lowered our target price to USD36 (40).
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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