Shares of VLGC owners have been volatile lately, Cleaves said, and so are the bank's ratings.
Two weeks after upgrading Oslo-traded Avance Gas and a little more than a week after bumping up BW LPG, Cleaves' Joakim Hannisdahl is downgrading both due to fluctuations in the companies' share price around his target price.
Both now carry sell ratings, with Avance dropping from buy and BW LPG dropping from hold.
"VLGC owners’ share prices have been a rollercoaster ride lately, forcing us yet again to revise our ratings despite retaining our target prices unchanged," Hannisdahl wrote in a note published on Tuesday.
Avance sill carries an NOK 22 ($2.43) target price and BW LPG NOK 37.
On Tuesday, Avance shares closed at NOK 23.30, a gain of less than 1%, but continuing a week-long rally that saw shares rise from NOK 19.20 last Tuesday.
Avance shares last traded that high on 25 August, when its price spiked from NOK 23.36 to NOK 24.14.
BW LPG's shares closed jumping from NOK 35.72 last Tuesday to NOK 39.96 on Monday before falling slightly to NOK 39.80 on Tuesday this week.
"Our only motivation for the downgrade is the higher share price," the note read.
Hannisdahl added that he sees downside risk in the near term, as the period from September until April tends to be a cyclical low point for the gas carrier sector.
But, he added, an inflection point for rates could come in the first half of 2021.
