Odfjell SE (Buy, TP: NOK124.00) - Robust market outlook
Chemical Tankers benefited from its spot exposure during 2022, while we believe peak-renewal season for COA volumes should bode well for Odfjell’s earnings potential heading into 2023e as rate renewals are backed by constructive market momentum on the abating swing tonnage and tight supply outlook. Our positive outlook trickles down to a DPS for 2023e of cNOK14 and for 2024e of cNOK13 – returning c32% of its market cap during the period. We reiterate our BUY and have increased our target price to NOK124 (109).Odfjell is engaged in the global market for transportation and storage of chemicals and other specialty bulk liquids, LPG/Ethylene products as well as a provider of related logistical services. Co.'s principal business is the transportation and storage of organic and inorganic bulk liquid chemicals, acids, animal fats, edible oils, potable alcohols, LPG/Ethylene and clean petroleum products. Co. has three reportable business segments: Chemical Tankers, which involve the servicing ports around the world; Tank Terminals, which engaged in cargo-consolidation programme in combined shipping and storage services; and LPG/ Ethylene, which Co. owns two carriers, Bow Guardian and Bow Gallant.
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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