Teekay Tankers (Buy, TP: USD74.00) - Solid potential on strong markets
Strong mid-size tanker rates have raised vintage Suezmax values, with the 1-year TC approaching USD45k/day, implying annual EBITDA of cUSD13m. The share price reflects a c33% discount to steel values, which on current 1-year TCs prices conventional 15-year Suezmax tonnage at 2.6x EV/EBITDA. Hence, we see solid return potential, with the risk largely offset by the 28% discount to NAV and limited leverage. We reiterate our BUY and have raised our target price to USD74 (73).
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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