Euronav is likely to commit to fleet renewal and continue to expand its newbuilding programme, according to DNB.
“We believe Euronav will continue to expand its newbuild programme and according to media reports has divested its last 2003-built ULCC, illustrative of new management’s commitment to fleet renewal,” equity analyst Jorgen Lian said in a note.
Earlier in January, the Saverys-led company ordered an ammonia-ready VLCC newbuilding at Chinese shipyard Qingdao Beihai Shipbuilding Heavy Industry.
Tradewinds has also reported that several tanker players have recently advanced on newbuilding projects, including John Fredriksen and Kjell Inge Rokke.
The Oslo-based bank maintained a “hold” for Euronav, but cut the target price to $17.90 from $18.40.
Shares closed at $17.67 on the New York Stock Exchange.
DNB said the share price will be pegged to the mandatory takeover bid for Euronav by the Saverys family company Compagnie Maritime Belge. The mandatory offer is now $17.86 per share after adjusting for the third-quarter dividend.
The target price is close to the mandatory offer, which represents a “fairly tight” price to net asset value (NAV) of 0.94 to 0.98 times, depending on the value of the non-marine business.
“This is despite major growth ambitions that would require significant capex in the coming years,” Lian said.
DNB’s pro forma NAV for Euronav is $19.30 per share.
The non-marine business at full suggested value based on Degroof Petercam’s fairness opinion would yield a pro forma NAV of $18.90 per share on DNB’s fleet valuation, or $18.30 per share applying 50% of the non-marine value.
Euronav reports fourth-quarter results on 1 February.
DNB forecasts an Ebitda of $176m for the quarter, which is 11% below consensus.
The bank has cut the estimate for 2023 Ebitda by 3%, but raised the estimate for this year by 3%, adjusting for Euronav’s announced fourth-quarter fixtures and recent rate movements.
