Danske Bank has launched coverage of GasLog with a hold rating based on the difficulties facing the LNG market.
Analyst Bjorn Kristian Roed placed a target price of $15 per share on the Peter Livanos-led owner.
In an introductory note, Roed said GasLog’s progress had been impressive with both fleet growth and the launch of an MLP.
“While the long-term outlook looks solid, we argue that an estimated weak 2015-2016 LNG shipping market offers limited triggers to lift the shares,” he said.
Roed has also downgraded Oslo-listed Awilco LNG to sell amid the belief it will offload an asset to boost its cash position.
“We see a risk that the company could run out of cash by mid-2016 if it cannot sell one of its older assets,” Roed said.
Awilco sold the 125,929-cbm WilPower (built 1983), which has been in cold lay-up since 2013, to an undisclosed buyer, this summer.
Danske believes LNG shipping will remain weak through 2016 but it should be poised for a strong upturn from 2017.
“New liquefaction capacity is set to increase by 54%, which will gradually absorb excess tonnage and we expect to see increased timecharter activity at improved rates starting from 2016,” Roed said.
