UPDATE: RS Platou Markets Upgrades Ship Finance to Buy, Raises PT

In a report published Monday, RS Platou Markets upgraded its rating on Ship Finance SFL from Neutral to Buy, and raised its price target from $16.00 to $22.00. RS Platou Markets noted, “We raise Ship Finance to BUY and increase our target price almost 40% to USD 22/share. Current dividend yield is trading in the high end of historical yield, while refinancing of 2013 debt maturity should remove any balance sheet concerns. However, key to our SFL upgrade is its unique position in the ship funding market. Traditional lenders are reducing their exposure to the industry, raising cost of capital, while pent up technological development on ship design is creating a highly attractive risk-reward for container newbuilds. We estimate that every USD 100m investment would raise dividend by USD 0.19 per share, or 12% on an annual basis.” Ship Finance closed on Friday at $17.37.