Genco Shipping & Trading (Buy, TP: USD27.40) - Short-term pain, long-term gain
The Q4 results were largely as expected, though QTD fixtures imply some downside risk to near-term consensus. Nonetheless, Genco traded up yesterday on what we believe is continued optimism of positive newsflow from China and a constrained delivery profile (20-year low orderbook-to-fleet ratio of c7%). The risk/reward remains in positive territory in our view, with 50%+ potential upside to our target price and 30% downside to record-low 2016 asset values. We reiterate our BUY but have trimmed our target price to USD27.4 (27.5).
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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