Frontline (Hold, TP: NOK42.00) - Is that all you got, winter?
We retain our mid-August view that “winter season could disappoint†given the vessel oversupply. VLCC rates are currently USD27k/day, or about 50% of the levels seen in the same period last year. November is the second strongest month of the year and followed by December before rates start averaging lowering into the spring and summer. We stick to our view that 2018e could be another challenging year for tankers, but we are increasingly more positive for 2019. We reiterate our HOLD recommendation and NOK42 target price ahead of Q3 results, due at c08:00 CET on 22 November, being 5% above consensus.
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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