Jefferies vandaag, EURN van 11 USD target naar 13 USD.
Crude Tankers: Reducing EPS Estimates For Remainder Of The Year, RecoveryExpectations Extended Into Late 3Q21/4Q21We are reducing our EPS estimates for 2H21 as rates remained under considerable pressure during 3Q21 due to the spread of COVID-19variants. Average modern VLCC rates were ~$8,000/day during 3Q21 and are trending higher during 4Q21, but below our previousexpectations. While there is a demand recovery for crude currently underway, it is taking longer and rising at a much slower pace dueto lingering COVID concerns than we expected. That said, although we are also reducing our 2022 estimates, we still believe sequentialimprovement will persist throughout 2H21 and 2022.
According to the IEA, global crude oil demand bottomed in 2Q20 at 83.1 MMbd but has since recovered by 17.0% to 97.2 MMbd during3Q21. Rising oil demand has been sufficient to clear the OECD inventory overhang and inventories are now below the minimum five-year trailing range. Additionally, OPEC and its allies came to an agreement in July to begin phasing out remaining production cuts of 5.8MMbd by 400 Kbd per month beginning in August 2021. The phase-down is subject to monthly review by OPEC+ and will be based onoil price stability and underlying demand growth. In late September, the group met and decided to keep production increases steady at400 Kbd in October, though there were discussions about the possibility of increasing production beyond the base amount as oil pricescontinue to rise. As such, we believe OPEC+ will continue to phase out production cuts of 2.0 MMbd during 2021 and 3.8 MMbd during2022 and that the trend of inventory destocking will reverse.
The supply picture for tankers remains extremely positive, with the orderbook-to-fleet ratio at ~8.4%. Meanwhile, the average age ofthe tanker fleet continues to increase with ~30% of tankers now over 15 years of age. There continues to be downward pressure onnewbuilding orders as there is too much regulatory and technological uncertainty as well as skepticism by traditional shipping lendersto finance newbuilding orders at this stage. We believe reduced access to capital coupled with regulatory uncertainty will continue to bea major theme for the sector for years to come. Further, with scrapped steel prices at elevated levels, we believe scrapping will increasematerially in the coming quarters, especially leading up to IMO 2023. With supply growth set to remain subdued in the coming quartersand years, any incrementally positive demand catalysts could boost tanker rates above our current assumptions.
EURN Buy $10.85 $13.00 $11.00 (0.55) (0.51) (0.35)(0.01)
10.85 current price, 13 new target, 11 old target. -0.55 usd eps verwachting voor Q3 (was -0.51). -0.35$ Q4 verwachting, was -0.01.