Odfjell SE Minor model adjustments
We have made slight adjustments to our model to account for the positive read-across from Stolt-Nielsen’s solid 10% TCE increase QOQ in Q2 and its outlook for a further 2–4% increase in Q3. We remain positive on the market outlook, with a 10% orderbook-to-fleet for chemical tankers, and solid MR markets (~60% above the 5-year average in the most recent month), limiting swing tonnage. Hence, on our estimates we calculate a 26% earnings yield, translating into a 13% dividend yield until end-2025, and see Odfjell as an attractive exposure to the tanker segment, trading at an average 2024–2025e EV/EBITDA of 3.4x (tanker peer group: 4.5x). We do not consider these changes to be material, and we have not changed our BUY recommendation. We have lowered our target price from NOK225 to NOK222.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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