Odfjell SE: 1 director

A director at Odfjell SE bought 50,000 shares at 109.710NOK and the significance rating of the trade was 64/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly s...

Odfjell SE (Buy, TP: NOK210.00) - Solid tanker yield at a discount

We see potential for the tanker market to improve on healthy demand and limited 3% supply growth in 2025e. We forecast a solid dividend yield of 20% for 2025–2026, and believe the stock offers attractive tanker exposure, trading at an average 2025–2026e EV/EBITDA of 2.3x (peers 4.2x) and P/E of 2.6x (peers 5.4x). We reiterate our BUY and have raised our target price to NOK210 (205), mainly on currency effects.

Odfjell SE (Buy, TP: NOK205.00) - Discounted tankers exposure

We believe chemical freight rates are set to increase towards end-2024 and into 2025–2026, supported by a still healthy orderbook, improving chemical trade and reduced swing tonnage. Thus, we estimate an average 2025–2026 earnings yield of 30%, with Odfjell trading at a 2025–2026e EV/EBITDA of 2.7x (peer group: 4.7x), which we find attractive. We reiterate our BUY, but have reduced our target price to NOK205 (222).

Odfjell SE Minor model adjustments

We have updated our estimates following the Q2 report, including Odfjell’s guidance for Q3 to be ‘somewhat’ below Q2, and adjusted our estimates for recent freight rate trends. QTD Q3 MR rates are down c20% QOQ (still c35% above the 2019–2023 average), which has increased the share of chemical volumes lifted by product tankers to c5% (c3% in YTD 2024 low). However, we remain positive on the market outlook with our expectations for tanker rates to rise towards end-2024 and again limit swing tonna...

Odfjell SE Minor model adjustments

We have made slight adjustments to our model to account for the positive read-across from Stolt-Nielsen’s solid 10% TCE increase QOQ in Q2 and its outlook for a further 2–4% increase in Q3. We remain positive on the market outlook, with a 10% orderbook-to-fleet for chemical tankers, and solid MR markets (~60% above the 5-year average in the most recent month), limiting swing tonnage. Hence, on our estimates we calculate a 26% earnings yield, translating into a 13% dividend yield until end-2025, ...

Odfjell SE (Buy, TP: NOK225.00) - Bullish earnings outlook

We have raised our Chemical Tankers rate estimates on the c7% increase QOQ in Q1 and with expectations for further growth in Q2, supported by an outlook for improved chemical production and limited supply ahead. We estimate a double-digit dividend yield through 2026e despite a modest payout ratio, and believe Odfjell screens as an attractive exposure to the tanker segment at an average 2024–2025e EV/EBITDA of 3.7x, versus the broader tanker peer group at 4.5x. We reiterate our BUY, and have rais...

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.

Odfjell SE Minor model adjustments

We have tweaked our estimates ahead of the Q1 results (due after market close on 7 May), expecting marginally higher costs QOQ from the initial disruption in the Red Sea, and edged up our 2024–2026e revenues. We still forecast strong TCE earnings for Chemical Tankers going forward due to solid fundamentals, further supported by Stolt-Nielsen’s guidance for a 6–8% average increase QOQ in TCE in Q2. Hence, we calculate an average 22% earnings yield for Odfjell for 2024–2025, leaving a 11% dividend...

A brewing challenge for the yards

Our 17th Annual Energy & Shipping Conference was well attended by investors and industry executives showcasing the still-growing interest for the sectors. Limited yard capacity is fuelling high newbuilding prices and raising freight rate expectations for the vast fleet renewal necessary in the coming decade. Long lead times underpin a bullish supply story for much of shipping in the coming years, albeit exposed to geopolitical risks affecting trade patterns. Our overall impression was general op...

Odfjell SE (Buy, TP: NOK185.00) - Top earnings yield potential

The company expects initial effects from the Suez disruption to be higher costs, partly offset by rates. However, we expect the TCE/day for Odfjell to slightly increase for 2024, on current chemical rates c85% above the 10-year mean, added tonne-miles on inefficiencies and a low orderbook-to-fleet ratio of c6%, resulting in a c26% earnings yield for 2024e. Hence, we find Odfjell attractively valued at a 2024–2025e average EV/EBITDA of 3.1x and P/E ratio of 3.8x (broader tanker peer group: 4.2x a...

Odfjell SE (Buy, TP: NOK179.00) - Red Sea tailwinds on rates

A record chemical freight market (c75% above 10-year average), with a low orderbook (c8% of fleet), could create a new normal for rates, and supported by a 20% average rate increase on COA renewals LTM, should result in strong earnings for Chemical Tankers. We see further upside potential from Red Sea disruptions, with product tanker rates poised to react. We find Odfjell attractively valued at a 2024–2025e average EV/EBITDA of 2.9x and P/E of 3.6x versus the broader tanker peer group at 4.5x an...

Odfjell SE (Buy, TP: NOK161.00) - On course for robust earnings

We estimate a marginal decline in rates for Chemical Tankers in Q3, while we believe the effect of previous COA renewals and an appealing fundamental outlook for the segment, with an orderbook-to-fleet ratio of ~7%, should support earnings in the coming years. We calculate an average EV/EBITDA of ~2.5x, and see an average DPS of ~NOK18 for 2024–2025e, representing a solid ~16% dividend yield. We reiterate our BUY and have raised our target price to NOK161 (154).

Odfjell SE Minor model adjustments

We have made minor adjustments to our estimates to reflect the Q2 report, fleet adjustments, and the updated guidance of a slight decline in TCE revenue QOQ. However, we expect the market to bounce back from the macroeconomic headwinds going into 2024, due to the still-attractive supply outlook with an orderbook-to-fleet ratio of c6%. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have raised our target price to NOK154 (147).

Northern Lights

Odfjell SE Minor model adjustments

We have made minor estimate revisions ahead of the Q2 report (due before the market opens on 17 August), to reflect recent market developments for chemical tank shipping. Peers have defied spot market headwinds for chemical shippers, delivering a solid QOQ EBITDA increase; we thus expect slightly better TCE income than the guidance. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have lowered our target price to NOK147 (151), reflecting currenc...

Odfjell SE (Buy, TP: NOK151.00) - Valuation looks attractive

Despite somewhat weaker than expected Q1 results and a softer Q2 outlook, we believe the fundamentals are in place for Odfjell SE to see solid earnings longer-term. Hence, at a 1-year forward EV/EBITDA of 3.6x versus the 5-year average of 5.7x, we find the current valuation attractive. Also, we believe investors should be set for hefty dividends, as we expect the company to return c50% of its market cap over 2023–2025. We reiterate our BUY, but have cut our target price to NOK151 (153).

Northern Lights

Northern Lights

Odfjell SE (Buy, TP: NOK153.00) - Positive rate momentum

Despite softer QOQ expectations for Odfjell Tankers in Q1 on weaker 2023 spot rates at the start of the year, we believe recent renewed momentum for MR and chemical rates should support upcoming COA rate renewals as the company still has ample volumes waiting to be signed. Hence, we continue to see further earnings potential for Odfjell, reflected in our 2023e EBITDA of USD497m (up 30% YOY). We reiterate our BUY and have raised our target price to NOK153 (138).

Generally an optimistic bunch

DNB hosted its 16th annual Energy & Shipping Conference. On day two, we hosted sector panels and presentations for dry bulk, LPG, car carriers, LNG and tankers with senior management representatives from 29 shipping companies. A resurging Chinese economy coupled with tight supply outlook, strong demand growth potential and regulations putting pressure to remove older vessels were among the common themes. Overall, the discussions showcase optimism across the sectors.