Navigator Holdings Ltd (Buy, TP: USD22.00) - Healthy cash flow inbound
The US-to-Asia ethylene price spread dropped recently on US production disruption (now partly rebounded), reducing terminal throughput and demand for NVGS ethylene vessels. We believe this also underscores the benefits of the company’s diversified model, with vessels switching to carrying ethane. On our positive outlook for US fundamentals supporting shipping demand, we see healthy rates, with upside potential to its 2% annualised Q3 yield on a 12–16% FCFE yield for 2025–2026e. We reiterate our BUY and USD22 target price.
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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