SFL Corporation Ltd (Hold, TP: USD12.50) - Solid backlog fairly valued
SFL has demonstrated its ability to conclude solid contracts YTD, increasing its total fixed-rate charter backlog by ~USD2bn. In tandem with attractive offshore markets, giving the potential for Hercules to secure further strong employment beyond its current contract – which would raise our annualised cash flow by USD0.31/share on similar terms – this is supportive of a DPS uptick. However, we also see utilisation risk, as the firm period left of the contract is relatively short. We reiterate our HOLD, but have cut our target price to USD12.5 (14.3).
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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