Himalaya Shipping (Hold, TP: NOK63.00) - Added cushion into better mar...

We have made slight positive estimate revisions following recent rate movements and the announcement of fixed rates for two of its vessels. Furthermore, last night’s private placement and ~USD15m of added liquidity sets the company up well for a constructive long-term backdrop in the sector. Hence, we believe the risk/reward looks more balanced, and have upgraded to HOLD (SELL), and have raised our target price to NOK63 (51).

‘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...

Vermilion Booster Shots: Attractive bottom-fishing stocks

For investors looking for bottom-fishing candidates; stocks that are breaking downtrends, exhibiting ascending reaction lows, and showing stabilizing relative strength.

Himalaya Shipping (Sell, TP: NOK51.00) - No imminent relief

We still see challenging fundamentals for dry bulk near-term and forecast the benchmark Capesize spot rate to remain below the company’s Capesize equivalent cash break-even rate for H1. Hence, we see limited dividend potential over the same period, coupled with downside risk to elevated asset valuations (24% downside risk to a 5-year-old Capesize on historical multiples). Thus, we believe risk remains skewed to the downside. We reiterate our SELL, but have raised our target price to NOK51 (45) o...

Bridging market weakness with RCF

Q4 as expected, while current rate weakness implies ~34% downside to Q...

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.

Himalaya Shipping (Sell, TP: NOK45.00) - Navigating rough seas

While the share price is down ~30% since mid-November, alleviating the majority of downside risk, we find the remaining risk still skewed towards the downside. This is due to: 1) the company’s high leverage amid deteriorating asset values; 2) our ~1% dividend yield for H1e; 3) increased LNG costs hurting the value of its dual fuel propulsion; and 4) an overly optimistic consensus. Hence, we reiterate our SELL and have cut our target price to NOK45 (64).

2025 could be wild. Or not.

High leverage, high upside

ABGSC Shipping Daily 8 January

Tanker, dry bulk and LPG markets down; Shipping peer group trades at P/NAV 0.72x; Only 0.6% of the container fleet idle as per end of 2024; HSHP commercial update: Implied Q4 EBITDA of USD 21m, 23% below cons; China bans U.S. sanctioned vessels

China dry bulk imports continue at solid levels

Himalaya Shipping (Sell, TP: NOK64.00) - On shaky ground into 2025e

We remain sceptical on the longevity of dry bulk shipping demand. We believe the clear imbalance between China’s apparent raw materials demand versus its actual imports poses a considerable risk to the dry bulk investment case, and expect the ensuing correction in freight markets to deteriorate asset value support. Hence, we reiterate our SELL and have trimmed our target price to NOK64 (65).

Much as expected, management remains positive

EBITDA of USD 31m (ABGSCe and cons at USD 30-31m). ~11% downside cons Q4 EBITDA management remains positive. Share to trade flat vs. peers.

Rates up ~70% YTD trumps current weakness

Himalaya Shipping (Sell, TP: NOK67.00) - Markets hinder near-term pote...

Despite Himalaya Shipping now having a fully delivered top-modern fleet, with limited need for further capital investment, we remain concerned about what we view as material headwinds for dry bulk in the months ahead. Moreover, asset values are at 15-year highs and are unsupported by current freight markets. Hence, we find the risk skewed to the downside, with asset values most likely to correct lower. We have downgraded to SELL (HOLD) and cut our target price to NOK67 (91).

A quality fleet at P/NAV 0.74x

Much as expected, management remains positive

EBITDA of USD 24m (ABGSCe and cons at USD 24m). No material news, management remains positive. Share to trade in-line with peers.

Dry bulk market developing as it should

Himalaya Shipping (Hold, TP: NOK91.00) - Fully delivered top modern fl...

Himalaya Shipping’s now fully delivered top modern fleet, with no further investments planned, has it well positioned to distribute excess cash flow to shareholders. However, we maintain our negative view on dry bulk shipping, and believe the downside risks outweigh any upside potential medium-term. We reiterate our HOLD, but have cut our target price to NOK91 (94).