SFL Corporation Ltd (Hold, TP: USD11.50) - Potential for buoyed dividends
The offshore market remains strong and conditions are still similar to those when the latest ~USD500k/day Hercules contract was announced, stoking expectations of further backlog extensions for the rig beyond Q4 2024 at attractive rates, in our view. We calculate annualised cash flow of USD0.33/share on top of our estimates from a further extension of the latest Hercules contract, potentially supporting an uptick in dividends. However, we believe the shares are already pricing in a potential increase in quarterly dividends, and 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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