Odfjell shares gained as much as 3.3% in Oslo after several brokers raised target prices.
Clarksons Securities said the Norwegian shipowner has “significant upside potential”.
Analyst Frode Morkedal upgraded the share price target by 36% to NOK 190 ($18) from NOK 140.
“Looking ahead, the company’s first-quarter 2024 guidance indicates a slight increase in earnings, owing to the ability to capitalise on higher freight rates from the Red Sea diversions,“ Morkedal said in a note.
The Odfjell stock fell on Friday after its report for the fourth quarter did not meet market expectations.
“Odfjell is currently trading at less than four times its EV/Ebitda, which is unusually low for an industrial shipping company that has reported stable and high earnings for nearly two years, combined with a near-record low orderbook that indicates a very positive outlook,” Morkedal said.
Clarksons, which has a “buy” recommendation, said the “company’s enterprise value could be repaid in four years at current market rates, despite the fleet’s 14-year average remaining lifespan”.
DNB also maintained “buy”. The Norwegian bank raised the target price to NOK 185 from NOK 179.
Analyst Jorgen Lian sees “top earnings yield potential”.
DNB expects the daily time charter equivalent rate for Odfjell to slightly increase for 2024 on the back of current chemical rates above the 10-year mean, added tonne-miles on inefficiencies and a low orderbook-to-fleet ratio.
Lian finds Odfjell “attractively valued“ compared with the broader tanker peer group.
Fearnley Securities raised the target price to NOK 155 from NOK 135. But the broker downgraded the stock to “hold” from “buy”.
“We downgrade to ‘hold’ due to the strong recent performance of the equity and we argue limited pricing upside comparable to peers,” analyst Fredrik Dybwad said in a note.
