Frontline (Hold, TP: NOK65.00) - Going to the mattresses
In our view, Frontline’s decision to withhold dividends was prudent as we see market headwinds continuing well into 2021. However, we deem the valuation at the upper end on an absolute and relative basis, with EV/GAV of 1.14x (peers at 0.8–0.9x), implying VLCC resale prices in excess of USD100m. Thus, we have downgraded to HOLD (BUY) and have cut our target price to NOK65 (70).
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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