Wallenius Wilhelmsen ASA (Buy, TP: NOK31.00) - Upgraded to BUY on flat contract rate
We have upgraded to BUY (HOLD) and raised our target price to NOK31 (23), having lifted our 2020e net profit by 58% on a flat HMG contract renewal rate versus our expectation of a 20% decline. On our new estimates we find the valuation compelling at a P/B of 0.35x, a 2020e P/E of 5.5x, one-third of the market cap in FCF, and a 5% dividend yield at the current payout ratio.Wallenius Wilhelmsen ASA, formerly Wallenius Wilhelmsen Logistics ASA, is a Norway-based shipping company. It is engaged in roll-on/roll-off (ro-ro) shipping and vehicle logistics, transporting cars, trucks, rolling equipment and breakbulk worldwide. The Company's activities are divided into two reporting segments: Ocean and Landbased. The Ocean segment transports cars and ro-ro cargoes and comprises of a fleet of more than 100 vessels. The Landbased segment provides terminal and inland logistics solutions and operates over 10 terminals in more than 15 countries. Wallenius Wilhelmsen ASA operates as a holding company for the Group that consists of Wallenius Wilhelmsen Ocean, Wallenius Wilhelmsen Solutions, EUKOR and ARC.
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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