Golden Ocean Group shares rose in Oslo after Pareto Securities raised the recommendation to “buy” from “hold”.
The stock was up as much as 5.6% to NOK 104.60 ($10.10) compared with Pareto’s target price of $13 (formerly $8.50) or NOK 135 (formerly NOK 91).
The Norwegian broker is raising its recommendation to “buy” for the first time in two years.
“After two years of (volatile) underperformance, we now believe the rising asset values and conservative estimates make dry bulk appealing again,” head of research Eirik Haavaldsen said in a note.
Golden Ocean shares lagged other sectors such as gas and tankers on the Oslo Stock Exchange in 2023.
“Q4 was strong, and while rates are coming down in Q1 — as one would expect given normal seasonality — an ageing fleet and continued macroeconomic improvement bode well,” Haavaldsen said.
Pareto has raised its estimates and is about 60% ahead of consensus on 2024 earnings per share. The investment bank expects the estimate trend to turn positive for the first time in two years.
“With an historically low orderbook (~5% for capesizes) and an increasing share of ageing lower-quality ships that will become less and less efficient — we believe brighter demand prospects into 2025 will boost sentiment again,“ Haavaldsen said.
“Rates surprised on the upside in Q4, and we would exploit the expected Q1 downturn heavily.”
Fearnley Securities has Golden Ocean as one of its top picks for 2024 after the stock advanced only 15% last year. Arctic Securities also gives a “buy” recommendation.
