Himalaya Shipping (Sell, TP: NOK51.00) - No imminent relief
We still see challenging fundamentals for dry bulk near-term and forecast the benchmark Capesize spot rate to remain below the company’s Capesize equivalent cash break-even rate for H1. Hence, we see limited dividend potential over the same period, coupled with downside risk to elevated asset valuations (24% downside risk to a 5-year-old Capesize on historical multiples). Thus, we believe risk remains skewed to the downside. We reiterate our SELL, but have raised our target price to NOK51 (45) on added value for its LNG propulsion.
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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