Genco Shipping & Trading Minor model adjustments
We have updated our estimates on Q1 actuals, QTD fixtures and revised fuel spreads. We do not consider these changes to be material, and we have not changed our BUY recommendation. We continue to see skewed risk/reward dynamics, with 90% upside to 1.0x NAV (105% upside to our target price) and material return potential, with a 2023–2025e dividend yield of c25%. More importantly, we calculate 10% downside risk if asset values fall to record-low (March 2016) levels one year forward. We calculate market-adjusted leverage of 9%. We have lowered our target price to USD26.8 (27.1), reflecting our forecast asset values one year forward.
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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