Frontline (Buy, TP: NOK60.00) - Target price raised to NOK60; BUY
When we upgraded Frontline to BUY on 6 March, the stock was trading at a ~10% NAV discount – and we still find the stock attractive at 1.17x NAV. Since March: 1) weak spot rates have led to accelerated scrapping; 2) an OPEC volume ramp-up could be around the corner (included in our March forecasts); and 3) end-of-decade regulation catalysts are approaching. In light of this and based on our blended (2019–2020) asset value forecasts, we have raised our target price from NOK42 to NOK60 and we reiterate our BUY. We are above Q1 consensus (results due at 08:00 CET on 31 March).
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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