Flex LNG Minor model adjustments
We reiterate our estimates ahead of the Q4 report, due before market opening on 28 February. Given the guidance for Q4 earnings given in the Q3 report, we maintain our USD35m revenue assumption (3% above Bloomberg consensus of USD34m). At the current share price, FLEX LNG’s vessels are valued USD183m, below the current newbuild price of USD188m (delivered cost). Thus, the market is not adding any premium to the vessels on the water or for the attractive delivery profile, which we find unjustified. We reiterate our BUY recommendation and NOK23.6 target price.
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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