SFL Corporation Ltd (Hold, TP: USD11.50) - Cash flow momentum building
We find the expected cash flows from the recent Hercules contract illustrative of the earnings potential for the Offshore segment in a strong market. While the container exposure is somewhat concerning given our market outlook, the company’s high-quality fleet and long-standing customer relationships offset part of the risk, in our view. Meanwhile, it is effectively diversifying revenue streams as its car carrier fleet enters service in the coming quarters. We reiterate our HOLD and USD11.5 target price.
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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