Navigator Holdings Ltd (Buy, TP: USD18.00) - Choppy waters, healthy cash flows
The LPG shipping market is facing multiple headwinds – trade tensions, Iran risk, and potential OPEC+ crude increases – all weighing on freight prospects. However, ethane, which makes up most of Navigator’s near-term spot exposure, is likely exempt from the trade war. Thus, combined with steady terminal earnings, we still expect healthy cash flows. We reiterate our BUY, but have reduced our target price to USD18 (23) on higher risk.
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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