Dorian LPG (Hold, TP: USD48.10) - Solid outlook reflected in valuation
The VLGC freight market has remained firm in recent weeks, supported by US inventories fuelling arbitrage, implying cUSD110k/day. As deliveries are set to slow, with just 29 vessels due until end-H1 2026 (40 in 2023), we see upside potential to our 2025–2026e average spot rate of USD44k/day. On the FFA curve, we calculate a c14% earnings yield, potentially allowing for an increased DPS. Despite the solid market outlook, we find the valuation fair at a P/NAV of 1.14x, and reiterate our HOLD, but with a raised target price of USD48.1 (43.0).
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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