Genco Shipping & Trading (Hold, TP: USD18.20) - Valuation reflects clouds on horizon
We see clouds on the horizon for dry bulk on concerns about China import demand, with its raw-material-heavy sectors potentially facing challenges, and 15-year-high asset values in a mediocre freight market. However, we believe much of this risk is offset for Genco by its share price implying a c40% discount to asset values and prospects of a healthy long-term market balance with a still-limited orderbook. We reiterate our HOLD, but have cut our target price to USD18.2 (22.7).
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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