Frontline (Hold, TP: NOK76.00) - Scrapping set to offset deliveries
Frontline’s modern and fuel-efficient, largely scrubber-fitted, fleet yields an attractive premium, which is set to increase in 2022 based on forward fuel spreads. Record-high steel prices and elevated fuel costs should drive scrapping in an ageing fleet, offsetting vessel deliveries. However, we remain cautious near-term, as crude export volumes still are below the 2019 level with a c6% larger fleet. We reiterate our HOLD, but have lifted our target price to NOK76 (69).
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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