Jefferies & Co. Maintains Hold Rating on NAT
In a report published earlier today, Jefferies & Co. reiterated its “Hold” rating on Nordic American Tanker Shipping Limited (NYSE: NAT), stating that they believe that shares are currently fairly valued and should remain with the current range for the coming months.
This came as a result of NAT's reporting of 4Q2010 EPS loss of $0.27, in line with Jefferies' estimates, but below consensus estimates of $0.02. In addition, Jefferies observed that tanker spot market conditions have improved dramatically “with average VLCC Spot Charter Rates up more than 100%”, noting that this reflects the balancing of supply and demand. Furthermore, NAT declared a cash dividend of $0.25 per share to be paid on March 4, 2011. Finally, Jefferies commented that NAT's strong balance sheet should put it in a good position for further consolidation in the tanker sector.
With a price target of $26, Jefferies notes that several risks such as a surge in oil demand and greater than expected tanker newbuilding deliveries may affect the price target.
NAT is currently trading at $24.75.
