Frontline (Buy, TP: NOK165.00) - More set to come
During Q3, Frontline’s VLCCs still lagged the dramatic freight-rate recovery for mid-sized tankers. For Q4 and beyond, we see potential for a fleet-wide rate rally. With ongoing volume displacement effects from the impending EU embargo on Russian oil, tanker rates should rise further as demand is boosted by a favourable distance effect on oil from Russia and alternative sourcing to Europe. We believe Frontline’s fleet is in a prime position to benefit from this. We reiterate our BUY and have raised our target price to NOK165 (144).
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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