Stolt-Nielsen (Buy, TP: NOK140.00) - IPO 2020, not 2017
We reiterate our BUY, and have raised our target price to NOK140 (139) after the Q3 results. We have reduced our earnings estimates for Tank Containers, due to challenging macro headwinds and margin pressure, but we believe the chemical tanker space is the one to watch. VLCC rates have soared 4x in the past few weeks, likely to be the first-mover in a broader tanker recovery. In January 2017 we noted that the possibility of a spin-off/IPO of Stolt Tankers could crystallise values. Following the company’s comments at the Q3 results, in our view this is now likely to happen in 2020, pending a strong tanker market.Stolt-Nielsen is a holding company. Co. through its subsidiaries is engaged in maritime industries. Co.'s operating units include Stolt Tankers, providing transportation services for bulk liquid chemicals, edible oils, acids, biofuels and clean petroleum products; Stolthaven Terminals, offering storage for bulk liquid chemicals, edible oils, acids, biofuels and clean petroleum products; Stolt Tank Containers, operating a fleet of tank containers for shipments of bulk liquid chemicals, food-grade products and bitumen via road, rail and container ship, as well as Stolt Sea Farm, focused on the production of fish including turbot, sturgeon, sole and caviar.
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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