Odfjell SE (Buy, TP: NOK225.00) - Bullish earnings outlook
We have raised our Chemical Tankers rate estimates on the c7% increase QOQ in Q1 and with expectations for further growth in Q2, supported by an outlook for improved chemical production and limited supply ahead. We estimate a double-digit dividend yield through 2026e despite a modest payout ratio, and believe Odfjell screens as an attractive exposure to the tanker segment at an average 2024–2025e EV/EBITDA of 3.7x, versus the broader tanker peer group at 4.5x. We reiterate our BUY, and have raised our target price to NOK225 (193).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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