Flex LNG Minor model adjustments
We have slightly adjusted our rate and financing estimates. We still forecast a healthy 2024–2026 dividend yield of 11% for Flex LNG. This is supported by its solid contract backlog with limited spot exposure in the next two years, mitigating risk to what we believe will become challenging freight markets. Additionally, we see upside potential to its cUSD80k/day average 2024–2026e TCE beyond the fixed contract period, with long-term charter rates (>5 years) of cUSD90k–100k/day. The Q3 results are due prior to market open on 29 November. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have lowered our target price from NOK355 to NOK345, mainly related to currency effects.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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