Odfjell SE (Buy, TP: NOK205.00) - Discounted tankers exposure
We believe chemical freight rates are set to increase towards end-2024 and into 2025–2026, supported by a still healthy orderbook, improving chemical trade and reduced swing tonnage. Thus, we estimate an average 2025–2026 earnings yield of 30%, with Odfjell trading at a 2025–2026e EV/EBITDA of 2.7x (peer group: 4.7x), which we find attractive. We reiterate our BUY, but have reduced our target price to NOK205 (222).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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