Flex LNG (Buy, TP: NOK16.20) - Target 35% premium to NB parity
We reiterate our BUY recommendation, but have lowered our target price to NOK16.2 (NOK23.6) on 1.0x our NAV of NOK16.2 (USD205m/vessel based on our rate forecast), which is a 35% premium to a newbuild parity NAV of NOK12 (USD185m/vessel). We no longer value on earnings multiples as we believe FLEX is likely to be more opportunistic, reaping the benefit of a strong spot market in 2019–2021e rather than taking a long charter at a marginal premium to the equilibrium rate.
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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