Euronav Minor model adjustments
We have updated our estimates owing to Q1 actuals, QTD fixtures and revised fuel spreads. We do not consider these changes to be material, and we have not changed our BUY recommendation. We see recent headwinds for VLCCs, driven by OPEC cuts in tandem with weak seasonality into summer, but still find global oil on water elevated, just 5% shy of the May 2020 storage peak. However, the Suezmaxes continue to show strength at USD50k/day, reflecting tight markets. Euronav screens as undervalued in our view, at 0.8x P/NAV, and c20% 2023–2025e earnings yields in contrast to bullish long-term fundamentals. We reiterate our USD23 target price.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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