Genco Shipping & Trading Minor model adjustments
We have updated our estimates, owing to Genco’s Q2 actuals and fixtures Q3-to-date, and we do not consider these changes to be material. Rates have turned down on soft volumes (excluding China), decent supply growth and easing congestion, which may adversely pressure vessel values until rates recover on currently favourable supply-side fundamentals. Meanwhile, we believe Genco’s 0.71x EV/GAV implies a 5-year Capesize value of USD33.3m (versus the current USD47.5m and all-time low from 2015–2016 of USD23m), yielding risk/reward skewed to the upside in our view. We have not changed our BUY recommendation. We reiterate our USD25.2 target price.
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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