Equity analysts at DNB Markets stamped Oslo-quoted shares of Avance Gas and Dorian LPG with a “buy” recommendation and set price targets of NOK 152.00 and NOK 28.00, respectively.
In both cases they argued that upside will likely depend on the fundamental arbitrage on LPG prices and the owner’s ability to extract the arbitrage in higher shipping rates.
The researchers calculated a current net asset value (NAV) of NOK 79.00 per share for Avance and noted a 10% change in asset values would alter their estimate by NOK 20.00.
The same analysts branded Dorian with an NAV of approximately NOK 18.00 per share and were quick to point out that a 10% increase in asset values would lift the figure by NOK 4.40.
As we have reported, many industry observers believe freight rates and valuations tied to very large gas-carriers and other classes of gas tonnage are going to rise in the coming months.
