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.

Contract coverage turns MTM positive

Flex LNG (Buy, TP: NOK335.00) - 13% yield highly appealing

Flex LNG remains insulated in a challenging freight market, with only one vessel open into a potentially poor 2025, while the two positions for 2026 are still likely to see options extended into 2028. Lower rates have led to our minor near-term adjustments, but we see no reason to doubt its USD0.75 quarterly DPS, offering an attractive 13% dividend yield into better markets. We reiterate our BUY, but have cut our target price to NOK335 (345).

Q3 as guided, Q4 guided as expected

EBITDA of USD 70m (ABGSC and cons at 70m). Q4'24 guidance in line with expectations. Share to trade flat to slightly down vs peers.

Market has turned south, but still too cheap

Market outlook weakens further

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...

Flex LNG Minor model adjustments

We have slightly adjusted our rate and financing estimates. We still forecast a healthy 2024–2026 dividend yield of 11% for Flex LNG. This is supported by its solid contract backlog with limited spot exposure in the next two years, mitigating risk to what we believe will become challenging freight markets. Additionally, we see upside potential to its cUSD80k/day average 2024–2026e TCE beyond the fixed contract period, with long-term charter rates (>5 years) of cUSD90k–100k/day. The Q3 results ar...

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.

Flex LNG Minor model adjustments

We have updated our estimates for the Q2 results, updated guidance, and announced refinancing. We still see an attractive 2024–2026e dividend yield at 12%, supported by its solid contract backlog mitigating near- to medium-term market risk. We also see upside potential to our average 2024–2026e fleet-wide TCE of cUSD80k/day, with 5-year TC rates currently quoted at close to USD100k/day. We do not consider our estimate changes to be material, and we have not changed our BUY recommendation. We rei...

More upside than downside, but still a HOLD

Q2 much as guided, special dividend in H2'24?

EBITDA of USD 63m (ABGSC and cons at 66m). Q3'24 guidance slightly below expectations. Flat share price reaction.

Minor changes, fully priced

LNG trade increases 1% in H1'24, less than our 3% FY'24 forecast. In-line with cons ensus. HOLD, TP of USD 30 (unchanged).

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.

Flex LNG (Buy, TP: NOK355.00) - Solid yield on mitigated market risk

On our estimates, Flex LNG offers an 11% average 2024–2026e dividend yield, which we find attractive given its solid contract backlog, mitigating near- to medium-term market risk. Looking beyond the current contract backlog, we find upside potential for our 2024–2026e USD80k/day average fleet-wide TCE, due to elevated and sticky newbuild prices implying a parity rate >25% above our estimates. We reiterate our BUY but have trimmed our target price to NOK355 (358).

Cool Company (Buy, TP: NOK151.00) - Potential to raise earnings visibi...

The recent seasonal uptick in rates implies a fairly tight market and we believe in a healthy high season, with potential upside due to possibility for disruptions in US LNG exports and a rebound for European demand, widening the arbitrage and offering solid contract opportunities. Assuming Cool Company’s open TFDEs are contracted at the current 1-year TC rate and USD90k/day for the second newbuild, we see an average 2025–2026e NOK18 DPS, implying a ~NOK180 share price at a 10% dividend yield. W...

Flex LNG Minor model adjustments

We have updated our estimates to factor in the Q1 results, the updated guidance, and recent market developments. We still believe Flex LNG is well-placed to navigate what we expect to be a soft freight market near-term and maintain its USD0.75 DPS, for a 10% run-rate yield. Additionally, we see potential upside to rates on new contracts due to elevated and sticky newbuild prices, implying a parity rate above USD100k/day, compared with our average fleet-wide TCE of cUSD80k/day for 2024–2026e. We ...

Cool Company Minor model adjustments

We have updated our estimates, owing to the Q1 report, and trimmed our 2024–2026e revenue. We still believe contracting of vessels set to come open remains the key to solidifying the valuation. We see upside potential on fixing available TDFE spot earnings days at current TC rates (USD65k/day) and the second newbuild securing a broadly similar rate as the recently announced contract, which would lift our average 2025–2026e dividend yield from c8% to 12%. We do not consider these changes to be ma...