reports
- Mats Bye
Ocean Yield (No_rec, TP: NOK) - Discontinuing coverage
We have discontinued our coverage of Ocean Yield following KKR’s successful acquisition of 94% of Ocean Yield’s outstanding shares in the voluntary offer. KKR intends to complete a compulsory acquisition of the remaining shares in Ocean Yield. We withdrew our recommendation and target price on the stock on 13 September following the offer; our last published estimates should no longer be relied upon.
- Mats Bye
SFL Corporation Ltd (Buy, TP: USD9.00) - Adding lease with Trafigura
SFL Corp announced yesterday it has agreed to acquire four LR2s (built in 2014 and 2015 and with scrubbers installed) for USD160m. The vessels will be chartered out to Trafigura on 5-year time charters at cUSD22k/day. We calculate a transaction EV/EBITDA of 8.5x, implying 5–6% potential upside to our 2021–2023e EBITDA, all else being equal.
- Mats Bye
SFL Corporation Ltd (Buy, TP: USD9.00) - Bulk tailwinds into Q4
We have upgraded SFL Corp to BUY (HOLD) and lifted our target price to USD9.0 (8.0). In our view, the Q3 dividend hike indicates that the company has sufficient ‘financial muscle’ to handle potential negative implications from Seadrill emerging from Chapter 11, and that it is time to look ahead. Our 2021–2023 EBITDA estimates are up 7–10% on recent charter announcements.
- Mats Bye
SFL Corporation Ltd (Hold, TP: USD8.00) - Looking fairly valued ahead...
We are 5% above consensus EBITDA ahead of the Q3 results (due before market open tomorrow). The company announced the sale of seven Handysize bulkers in September, prompting us to reduce our EBITDA by 3% for 2022e and 4% for 2023e. Following the share price gains since August, we now consider the stock fairly valued. Hence, we have downgraded SFL Corp to HOLD (BUY), while we reiterate our USD8.0 target price.
- Mats Bye
Odfjell SE (Buy, TP: NOK38.00) - Meaningful recovery delayed again
We reiterate our BUY and NOK38 target price in Odfjell, having reduced our estimates slightly due to the Q3 report. A meaningful recovery in the chemical tanker markets appears to be delayed again, but the fundamentals for 2022 continue to seem promising, thus our optimistic view of the stock.
- Mats Bye
Odfjell SE Minor model adjustments
Ahead of the Q3 results (due at prior to market open on 4 November), we have updated our estimates owing to recent market developments. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have lowered our target price from NOK39 to NOK38 due to currency effects. For Q3, we forecast EBITDA of USD60m, and expect focus to be on the near-term market outlook and COA freight-rate renewals (which in our view, should offer another positive data point for s...
- Mats Bye
Ocean Yield (No_rec, TP: NOK) - Bid by KKR
This morning, Ocean Yield announced it has reached an agreement for KKR to launch a voluntary offer of NOK41/share. Aker ASA, holding 61.7% of the shares, has undertaken to accept the offer, and the board of directors recommends shareholders accept. The closing price on Friday was NOK32.5 and the offer price represents a 26% premium to the last close, a 38% premium to the average share price of the past six months and a 17% premium to our NOK35 SOTP (including USD50m value for the FPSO). Given D...
- Mats Bye
Ocean Yield (Buy, TP: NOK37.00) - NOK41 offer from KKR
Ocean Yield announced this morning it has reached an agreement for KKR to launch a voluntary offer of NOK41/share. Aker, holding 61.7% of the shares, has undertaken to accept the offer, and the board of directors recommends shareholders to accept. The offer price is at a 26% premium to last close, and a 17% premium to our SOTP.
- Mats Bye
Odfjell SE Minor model adjustments
We have updated our estimates, owing to the Q2 results. We do not consider these changes to be material, and we have not changed our BUY recommendation. Despite a solid demand picture and a healthy fleet supply outlook, the chemical tanker markets continue to face headwinds from excessive swing tonnage. Heading into a seasonally stronger winter season, we model for average MR rates of USD14k/day for 2022, up from USD8k/day this year, which should suffice for a reversal of swing tonnage. We reite...
- Mats Bye
Odfjell SE (Buy, TP: NOK39.00) - GDP growth fending off the swing
Despite lowering our EBITDA for 2021–2023e, we reiterate our BUY and have raised our target price to NOK39 (33). H1 was challenging, but we remain confident that the chemical tanker market should rebound on strong underlying demand growth and a healthy supply balance.
- Mats Bye
SFL Corporation Ltd (Hold, TP: USD8.60) - Retaining container exposur...
SFL yesterday announced it has agreed to acquire two 14k TEU container vessels and the sale of 18 feeder vessels that, on our estimates, will be EBITDA-positive by cUSD3m per annum. While the price tag for the two 14k vessels is confidential, we expect a price well below the USD140m indicated by VesselsValue, as the TC announced with the sale is below current market rates.
- Mats Bye
Dorian LPG (Buy, TP: USD17.00) - One step at a time
We reiterate our BUY and USD17 target price; we believe the company is taking the right steps to crystallise shareholder value through dividends, share buybacks and exploring asset sales. We have lowered our 2022e EPS by 29% on a more muted view of the current quarter, but raised our 2023e by 7% and 2024e by 16% on a lower share count and higher fuel spreads.
- Mats Bye
SFL Corporation Ltd (Hold, TP: USD8.60) - Counting down to H2 2022
Last night SFL Corp announced that the West Hercules rig will be redelivered by Seadrill by H2 2022, and set to charter at USD40k–65k/day – above the debt-servicing cost of cUSD60k/day. In our view, this limits the risk of a DPS cut within the coming year. SFL has guaranteed USD83m of the USD182m bank debt on the unit. Beyond H2 2022, we see cash generation at risk if the unit is left without a contract for a sustained period.
- Mats Bye
- Mats Bye
Ocean Yield Minor model adjustments
We have updated our estimates following the Q2 report and recent deal announcements. In our view, the Q2 results confirmed the case, supporting our view that its solid balance sheet should allow Ocean Yield to execute on new acquisitions, in turn building up its distribution capacity. We do not consider these estimate changes to be material, and we have not changed our BUY recommendation. We reiterate our NOK37 target price.
- Mats Bye
- Mats Bye
SFL Corporation Ltd (Hold, TP: USD8.60) - Fairly valued
We have raised our target price to USD8.60 (7.50) based on a stable quarterly USD0.15 DPS and a dividend yield of 7%. However, we believe this leaves the stock looking fairly valued, and reiterate our HOLD, with a 7% dividend yield in line with or below returns on some corporate bonds, and increases in payouts likely still some way off. In our view, SFL remains well funded, both for potential negative events from a Seadrill Chapter 11 process and for continued growth.
- Mats Bye
Dorian LPG (Buy, TP: USD17.00) - A final bite at 2021 estimates
Based on the recent guidance, we have lowered our VLGC earnings estimates and expect a TCE rate of USD47k/day for the final quarter of financial year 2021. This takes our Q4e adj. EBITDA 1% above consensus ahead of the report, due before market open on 19 May. We reiterate our BUY and have lifted our target price to USD17 (16), as we view the recent share buybacks as accretive to NAV.
- Mats Bye
Odfjell SE (Buy, TP: NOK33.00) - Looks like a trough Q1
Despite a few hiccups in Q1, we view the underlying story for the chemical tanker space as intact; chemical trade should rise in tandem with improved GDP growth as global economies recover from the Covid-19 pandemic. The depressed crude and product tanker markets are likely to continue to affect the chemical tanker market, but we believe Q1 was the trough and that 2021 should bode well for a gradual recovery. We reiterate our BUY and NOK33 target price.
- Mats Bye
Ocean Yield (Buy, TP: NOK36.00) - Stepping up its distribution
We reiterate our BUY, but have lifted our target price to NOK36 (31), as we see increasing dividends into 2022e. The legacy portfolio is managed, and we believe the FPSO could be viewed as an option on a continued oil price recovery, with limited downside risk attached. Q1 run-rate orders in the container shipping space represented 30% of the fleet, which should see new transactions emerge over the next few quarters, further strengthening the distribution capacity.
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.