Golden Ocean (Buy, TP: NOK138.00) - Riding out the rough seas
We see waves of latent upside potential on the rapidly unfolding Chinese reopening to mirror the tight supply-demand balance facilitated by a 25-year low orderbook-to-fleet ratio of c7%. We consider Golden Ocean’s current valuation attractive in light of its meaningful 20% 2023–2024e earnings yield derived from its cost-conscious cUSD11.7k/day cash breakeven and consequential 42% leverage (versus peers at 30%). We believe these strengths can float the company past what are likely to be dull returns for H1e before the upturn for large bulkers fully materialises in H2e. We reiterate our BUY but have cut our target price to NOK138 (144).
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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