Stolt-Nielsen (Buy, TP: NOK120.00) - Ready, low-priced, and diversified
Stolt-Nielsen has cut capex and secured additional financing in response to Covid-19 headwinds, while boasting a solid USD519m liquidity position at end-Q1. Lower bunker costs (down 44% QOQ) and improved rates are set to lift Tankers’ result QOQ, but tough markets seem set to last into 2021 before we see a recovery. We expect lockdowns to have hurt Stolt Tank Containers, while increased demand for storage should benefit Terminals. The stock is trading at a P/B of 0.4x – a recent low and well below its historical average of 0.7x. After a change of analyst, we have upgraded the stock to BUY (HOLD), but have lowered our target price to NOK120 (NOK140).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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