Dorian LPG (Hold, TP: USD44.00) - Still-solid earnings
The VLGC freight market has seen a significant decline recently, with solid draws on US propane inventory last week during the cold spell. However, we believe the forecast for warmer weather should keep inventories above the 5-year average and thus aid the US-Far East arbitrage, which currently implies rates of cUSD60k/day, well above spot rates. The latest dividend represents a modest c10% dividend yield, despite an earnings yield of c18% for its Q3 2024–Q2 2025 allowing for more. We have raised our target price to USD44 (43.5), but have downgraded the stock to HOLD (BUY) on full valuation.
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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