Flex LNG Minor model adjustments
We have updated our estimates to factor in the Q1 results, the updated guidance, and recent market developments. We still believe Flex LNG is well-placed to navigate what we expect to be a soft freight market near-term and maintain its USD0.75 DPS, for a 10% run-rate yield. Additionally, we see potential upside to rates on new contracts due to elevated and sticky newbuild prices, implying a parity rate above USD100k/day, compared with our average fleet-wide TCE of cUSD80k/day for 2024–2026e. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our NOK358 target price.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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