Stolt-Nielsen (Buy, TP: NOK425.00) - Attractive valuation
Despite softer QOQ expectations for Stolt Tankers for Q3 on weaker rates, we believe easing swing tonnage and a tight supply outlook to be supportive long-term for chemical tankers. Thus, we estimate an 11% average dividend yield for 2024–2025 on a prudent payout ratio below 50%, while allowing for a near 40% decline in NIBD. We find the current valuation attractive at a 1-year forward EV/EBITDA of ~4x, below the 10-year average of 5.8x. We reiterate our BUY and NOK425 target price.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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