Golden Ocean (Buy, TP: NOK150.00) - Still sunny above the clouds
We have cut our forecasts for Golden Ocean due to disappointing dry bulk freight markets so far in H2, but see potential for a rapid turnaround with rising activity in China reflecting the tight supply-demand balance. The current muted forward freight rates point to a 6% earnings yield for 2023e, while our estimates suggest a solid 24%. Also, risk/reward is skewed to the upside in our view; an (unlikely) 2016 replay would suggest only 50% downside potential to NAV, but 2021 yield pricing sizeable upside potential. We reiterate our BUY and have raised our target price to NOK150 (145).
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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