SFL Corporation Ltd (Hold, TP: USD12.00) - Potential DPS uptick on cash flow
We see support for strong cash flow in the coming years from: potentially USD0.33/share higher annualised cash flow than we assume by contracting the Hercules rig beyond its current Q3 2024 contract at similar terms; and cash proceeds from purchase obligations for nine container vessels and favourable extension options on six. As a result, we see potential for SFL making further investments in high-yielding assets or an uptick in dividends. We reiterate our HOLD, but have raised our target price to USD12.0 (11.5).
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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