DNB Markets has taken up coverage of Arne Fredly’s Hunter Group and introduced new VLCC rate forecasts for 2020.
Analysts led by Nicolay Dyvik placed a buy rating on the VLCC newcomer amid the projection VLCC resale prices will reach $100m by the middle of next year.
Hunter has seven VLCC newbuildings on order and in the money and holds options for three more.
“Hunter's modern scrubber-fitted VLCCs would earn a $12,000 per day premium rates to the benchmark VLCC on our forecasts for 2020, while at the same time offering the highest upside potential to appreciating VLCC asset values among our peer group,” Dyvik wrote in a report today.
He is forecasting standard VLCCs to earn $41,000 per day in 2020, with eco vessels at $47,000 per day.
However, a standard VLCC with a scrubber fitted is forecast to earn $51,000 per day in 2020 and an eco VL with a scrubber $53,000 per day based on current forward fuel prices and spreads, the analyst explains.
DNB Markets has placed a NOK 5.3 per share target price on Hunter, which will take delivery of its newbuildings in what is expected to be an improved market.
The analyst notes VLCC resale prices are up 10% since last September to $90m today.
This is expected to climb to $100m by the middle of next year, and further to $107m by 2020, he adds.
