Norne Research is forecasting a stronger fourth quarter than initially expected for Stolt-Nielsen.
Analyst Mindaugas Cekanavicius raised its estimates for the world’s largest chemical tanker owner, forecasting profits of $82.8m and revenues of $702m amid a stronger market.
“Significantly increasing chemical tanker rates during the contract renewal period should have been a positive argument for the company,” he wrote.
“The officially declared outlook was also optimistic for the tanker segment in 2024.”
He said the company previously said sailed-in revenues were expected to increase between 1% and 3% in the fourth quarter.
He described guidance for Stolt-Nilsen’s terminals business as stable, its tank container business as slightly weaker and its sea farm vertical as solid.
The bump in forecast was not the result of the security situation in the Red Sea, as Cekanavicius said chemical tankers largely operate away from the region, although he expects more guidance on that when the company reports earnings on 1 February.
The company said in its third-quarter earnings that it expected the chemical tanker market to tighten in the fourth quarter as swing tonnage moved out of the sector, with strong rates to be earned as contracts came open.
In the third quarter of 2023, its 90 chemical tankers produced $422m in revenue, by far its largest segment.
Cekanavicius’ forecast bottom line — which works out to $1.55 per share in earnings — still trails the consensus of $90.2m in profit or $1.68 on a per-share basis.
Revenue projections are higher, however, with the consensus coming in at $697m.
Stolt-Nielsen’s Oslo-listed shares were up NOK 4.50 ($0.43) to NOK 395 in early trading on Thursday.
