Frontline (Hold, TP: NOK33.00) - Making up for weak start to Q4
The guidance for QTD VLCC spot rates given in the Q3 report was lower than that of VLCC peers, and we expect Frontline to have partly closed the gap during Q4 (results due before the market opens on 28 February). Our lowered TCE Q4e revenue leaves us 22% below EBITDA consensus. As DHT has already made – and Euronav is seeking to make – a deal to expand its fleet, Frontline is lagging behind when it comes to securing a leading position in VLCCs. We reiterate our HOLD but have cut our target price to NOK33 (44).
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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