Dorian LPG (Buy, TP: USD40.00) - Near-term softness with potential
We see the possibility of negative near-term news flow on soft VLGC headline rates and the potential for reduced utilisation. However, we are positive medium-term, with solid US-FE arbitrage (average USD72k/day in calendar 2025) and limited vessel deliveries over the next seven quarters (~4% annualised), leaving solid upside potential to rates. By using the arbitrage as our spot rate for 2025e, we calculate a 23% earnings yield. We reiterate our BUY, but have cut our target price to USD40 (51).
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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