Frontline (Buy, TP: NOK200.00) - Premium stock at a discount
We have increased our 2023e EBITDA by 12% as we expect the current mid-size tanker strength to continue and see plenty potential latent upside to VLCC earnings as China reopens and crude imports start flowing amid an exceptionally low orderbook-to-fleet ratio of 3.6%. Frontline has decoupled from its historical +20% NAV premium pricing to a 10% discount, which we consider an attractive entry point with c20% 2023–2024e earnings yield and 45% potential upside to our target price. We reiterate our BUY and have raised our target price to NOK200 (194).
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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