Euronav (Buy, TP: USD20.10) - Suez tailwinds and VLCC upside
We have made limited changes to our 2022–2024e as Suezmax earnings have levelled out at robust levels and we expect further upside in VLCC rates as China reopens and crude imports start flowing after Chinese New Year. Euronav’s current discount to steel values reflects an overly pessimistic view on the tanker space in our view, considering exceptionally tight supply-side fundamentals. We reiterate our BUY and have raised our target price to USD20.1 (18.2) as we await the final outcome of the Euronav-Frontline saga.Euronav is a provider of maritime shipping and offshore services engaged primarily in the transportation and storage of crude oil. As of Apr. 4, 2017, Co. owned and operated a modern fleet of 55 vessels (including four chartered-in vessels) with an aggregate carrying capacity of approximately 13.7 million deadweight tons, or dwt, consisting of 31 very large crude carriers, one ultra large crude carrier, 21 Suezmax vessels, and two floating, storage and offloading vessels. Co. has two operating segments: the operation of crude oil tankers on the international markets (tankers) and the floating production, storage and offloading operations.
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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