Flex LNG (Hold, TP: NOK331.00) - Stable earnings backlog
Flex LNG’s solid contract backlog with only one vessel open from Q2 2024 and all other vessels on contracts until at least Q1 2027 (assuming options are exercised) should support its quarterly USD0.75 DPS for a c10% (12% excluding excess cash) run-rate dividend yield, and mitigate the risk to a possibly weak freight market due to hefty vessel deliveries and modest export growth near-term. However, we expect c22% global export growth in 2026–2027e to alleviate supply headwinds, which fits well with Flex LNG’s contract portfolio. We reiterate our HOLD and have cut our target price to NOK331 (375).Flex Lng Limited. FLEX LNG Ltd. is an owner of liquefied natural gas (LNG) carrier vessels and floating storage regasification units (FRSUs). The Company is focused on commercial activity relating to securing hydrocarbon feed stock for floating liquefaction projects, constructing, owning and operating floating liquefaction vessels and/or LNG vessels and sales and marketing of hydrocarbons and business in connection therewith, including investing in other companies. The Company operates a fleet of LNG carriers and has four M-type, Electronically Controlled, Gas Injection (MEGI) LNG carriers with a capacity of approximately 174,000 cubic meters under construction. The Company markets these vessels for charter and is also pursuing FSRU projects. The Company has four modern LNG vessels on short term charter that are being traded in the spot and short term LNGC market. Its subsidiaries include FLEX LNGC 1 Limited, FLEX LNGC 2 Limited, FLEX LNG Shipping Limited and FLEX LNG Management Limited.
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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