DNB has cut the recommendation for Golden Ocean and 2020 Bulkers to “hold” from “buy”.
The Norwegian bank said a rally in the stocks has made the two bulker owners less appealing.
But equity analyst Jorgen Lian raised the share price target of Golden Ocean to NOK 121 ($11.35) from NOK 106.
The shares traded around NOK 116 on Oslo Stock Exchange on Tuesday.
“Despite intact appealing long-term supply-side fundamentals, we find the risk/reward less attractive at the current valuation,” Lian said.
DNB highlighted the risk of demand headwinds for 2024 as Chinese demand reverts after strong imports aided dry bulk markets in 2023.
Golden Ocean will report results for the fourth quarter on 29 February.
Lian forecast $54m in adjusted net profit for the quarter, which is 5% above consensus, and a quarterly dividend of $0.25, versus consensus of $0.19.
DNB hiked the target price of 2020 Bulkers to NOK 146 from NOK 130. Shares traded around NOK 144 in Oslo.
“The recent performance of 2020 Bulkers’ stock leaves a less appealing entry point for investors, in our view,” Lian said.
The 2020 Bulkers stock has risen more than 50% since September.
“With asset values reflective of better markets underpinning the valuations, we find reason to be cautious at these levels.”
The company publishes its fourth-quarter report tomorrow. DNB expects $20m in Ebitda.
Pareto Securities also raised the target price of Golden Ocean on Tuesday, to NOK 147 from NOK 135 previously. The recommendation is maintained at “buy”.
