Odfjell SE (Buy, TP: NOK91.00) - Good market momentum
Ahead of the Q3 report (due after market close on 3 November), we have raised our near-term estimates, putting us 10% above consensus on Q3e EBITDA. We find Odfjell’s tanker fleet in a COA sweet spot, as we expect the segment to capture gains from elevated spot markets, while also securing growth in COA rate renewals on strong market momentum, and in turn earnings to counter a potential macroeconomic slowdown. We reiterate our BUY and have raised our target price slightly to NOK91 (90).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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