Euronav (Buy, TP: USD23.00) - Upside potential to Q2 consensus
Euronav’s board has proposed a catch-up USD1.1 DPS, which would bring the 2023e dividend yield to ~16%. This assumes sailed-in VLCC rates of USD44.5k/day, below the current 1-year TC rates when accounting for Euronav’s eco exposure. Due to the ongoing dispute between CMB and the Fredriksen Group, Euronav’s current 0.88x P/NAV screens attractively, in our view. Consensus is for a QOQ EBITDA drop in Q2, despite VLCC and Suezmax rates averaging USD80k/day so far (Q1 average: USD54.7k/day and USD70k/day, respectively). Hence, we see upside potential to 2023e consensus EBITDA. We reiterate our BUY and have raised our target price to USD23 (20.5).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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