Q2'25 revised up, but still a HOLD

Q1 EBIT in line, but miss on net financials

Depressed valuation, unenthusiastic market

Another abrupt change

The US Trade Representative on 17 April published revised US port fees with significant changes to the initial proposal based on industry feedback. In its current form, the fees will primarily discourage use of Chinese-controlled maritime trade services to the US, and directly affect the use of Chinese-built vessels in US ports (with several considerable exemptions to avoid harm to US trade). The previous broader fees based on fleet composition and share of Chinese-built vessels has been scrappe...

Cool Company (Buy, TP: NOK120.00) - Persevering through the storm

The share price is down sharply on all-time low freight markets and weak shipping sentiment. While we believe rates will remain depressed in 2025, we see improvements from 2026. The share price implies a 2026e P/E of ~4x, versus Flex LNG at ~8x; applying the Flex LNG multiple indicates a valuation of ~NOK100. Hence, we find the risk skewed to the upside, and reiterate our BUY and NOK120 target price.

‘The times they are a-changin’

The recurring theme at our 18th Energy & Shipping Conference was geopolitical uncertainty and a potential trade war, warranting a wait-and-see approach, particularly on the Trump 2.0 effect. The consensus view pointed to high asset values, with no rush to the yards, aligning with below-NAV valuations across most of our coverage. However, panellists generally saw less downside risk than the 25% average discount to steel for our Tanker, Dry Bulk and Gas coverage. Overall, the day highlighted uncer...

Cool Company (Buy, TP: NOK120.00) - Fighting an uphill battle

We expect improving markets towards 2027 on solid demand growth, offsetting the heavy delivery scheduled. We find the upside potential outweighs the downside risk in Cool Company, with c20% upside to the current share price applying USD60k/day TFDE and USD80k/day 2-stroke spot rates in 2027 on 7x EV/EBITDA and P/E, and with a NOK130/share valuation on same multiples raising the spot rate assumptions by USD10k/day. We reiterate our BUY, but have cut our target price to NOK120 (130).

DPS cut to zero

Q4 largely in line, but dividends cut to zero

EBITDA of USD 58m (ABGSCe at USD 57m, cons at USD 55m); Q1'25 guidance in line with cons, DPS cut a negative; Share to trade down 3-5% vs. peers

Lower rates imply dividend cuts for '26

A playbook on US tariffs

As a response to recent news flow of potential tariffs and countermeasures, we highlight the main implications for the shipping sectors we cover. While the specifics remain uncertain, the below input might assist in gauging potential impacts of the disruptions.

Cool Company (Buy, TP: NOK130.00) - Still an attractive risk/reward

On our expectations for improving markets towards 2027, we believe the upside potential outweighs the freight market lull. Applying the current implied 2–3-year TC rate as spot rates for 2026e, we calculate a cNOK95 fair value on a 10x P/E and 8x EV/EBITDA. However, raising spot rates to reflect current newbuild prices indicates a NOK200 fair value on similar multiples. We reiterate our BUY, but have reduced our target price to NOK130 (133).

DPS cut to prepare for more rainy days

'25e DPS cut by 63%. ABGSC '26e EBITDA +19% vs. consensus. TP of NOK 148 (152) – BUY

Cool Company (Buy, TP: NOK133.00) - Upside potential outweighs risk

Despite soft freight markets, we believe Cool Company offers attractive upside potential at the current valuation, trading at an average 2025–2026e EV/EBITDA of 7.0x (FLNG 9.5x). If we assume spot rates matching opex translates to 10.0x, spot rates equal to the YTD 3-year TC rates would calculate to 6.2x (or NOK195/share at an 8.0x EV/EBITDA). We reiterate our BUY, but have cut our target price to NOK133 (160).

Q3 in line, DPS cut by 63%

EBITDA of USD 58m (ABGSCe at USD 59m, cons at USD 57m). Cuts back on dividend, introduces buybacks. Share to trade down 5% or more vs. peers.

Market has turned south, but still too cheap

Cool Company Minor model adjustments

We have slightly adjusted our estimates. We still believe the contracting of vessels set to come open remains key to solidifying the valuation. By fixing the available TFDE’s spot earnings days at USD60k/day and the second 2-stroke newbuild at USD90k/day until end-2026, we calculate an average DPS of NOK17 for 2025–2026e, which translates into a NOK170 share price at a 10% dividend yield. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have sli...

30-40% NAV discount and yielding 15%

Minor changes to estimates. ABGSC '26e EBITDA +20% vs. consensus. TP of NOK 151 (155) – BUY.

No surprises, DPS still steady at 15% yield

EBITDA of USD 60m (ABGSCe at USD 60m, cons at USD 56m). Secures a 1YR TC, current market at USD ~60k/day. Share to trade up 1-2% vs. peers.

Minor changes, attractively priced

LNG trade increased 1% in H1'24, less than our 3% FY'24 forecast. Minor changes, sightly above cons for Q2. TP of NOK 155 (156) – BUY.