Teekay Tankers (Buy, TP: USD2.00) - USD190m liquidity is enough
Teekay Tankers beat expectations for Q2 and guides for improving rates QTD. Hence, we have raised our 2018e for EBITDA by 21%. Record tanker scrapping and slowing contracting should contribute to improving supply and demand fundamentals – possibly ahead of our initial expectations. On our forecasts, pro-forma liquidity of USD190m at end-Q2 should outlast market headwinds into 2019, and the current 45% discount to NAV is unwarranted, in our view. We reiterate our BUY recommendation and USD2.00 target price.
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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