Odfjell SE (Buy, TP: NOK138.00) - Still-meaningful upside potential
Despite somewhat softer Q4 COA rate renewals than we expected, Odfjell still sees momentum in renewals for the coming quarters, while we believe EU embargo effects should support the company’s spot market exposure (54% of Q4 volumes), as the MR market is starting to strengthen again following the EU embargo. Hence, we have raised our 2023e EBITDA by 6% to USD483m and our target price to NOK138 (124), and reiterate our BUY.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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