Market Overview

Four Stocks Stifel Just Initiated Coverage On

Four Stocks Stifel Just Initiated Coverage On

Analysts at Stifel on Wednesday initiated coverage of Ardmore Shipping Corp (NYSE: ASC), DHT Holdings Inc (NYSE: DHT), Euronav NV Ordinary Shares (NYSE: EURN) and First Trust Intrmdt Drtn Prfrd & Incm Fd (NYSE: FPF).

Admore Initiated At Buy

Shares of Admore were initiated with a Buy rating and $16 price target.

The analyst, Benjamin Nolan, expects the refined product tanker, charter-rate environment to remain "firm" over the next two years. Since Admore has "substantial leverage" to the sector, shares are expected to appreciate "materially" on strong cash flow and earnings.

Nolan also noted that shares are trading at a 6.8x multiple to his 2016E EV/EBITDA, which is below the peer average multiple of seven to eight. The analyst added that as the market fundamentals improve, the valuation gap will close and shares could even return to its historical peak of eight to nine.

Finally, regarding the company's low share count, "moderate" leverage and exposure to spot rates, the analyst suggested that the company has the "highest degree of operating leverage" to changes in spot rates.

Related Link: Raymond James Analyst Sees Crude Oil Trading Higher Than Current Levels In Next 6 Months

DHT Initiated At Hold

Shares of DHT Holdings were initiated at a Hold rating with no assigned price target.

Nolan noted that crude tanker rates are likely to remain "strong" through 2015, as OPEC continues to maximize its production. However, downside risk exists for 2016 and potentially beyond from a potential OPEC production cut and a growing tanker fleet.

Nolan continued that DHT is "one of the few and largest" crude tanker pure plays in the equity market. As such, so long as OPEC maintains high levels of production, crude demand will remain firm. In fact, low oil prices have driven demand growth, while more oil is moving from the Atlantic to the Pacific, which requires more shipping capacity per barrel.

However, crude tanker supply growth has been less than 1 percent per year in 2014 and 2015, and the analyst is now expecting a 4 percent growth in 2016 and "potentially that much again" the following year. As such, this will create a "more challenging supply hurdle."

Euronav Initiated At Hold

Shares of Euronav were also initiated at a Hold rating with no assigned price target.

Nolan noted that Euronav faces "few" potential upside catalysts in the near term. Identical to his analyst on DHT, the company also faces similar downside risk from a potential OPEC production cut and supply growth in the segment.

First Trust Initiated At Buy

Shares of First Trust were initiated with a Buy rating with no assigned price target.

Analyst Alexander Reiss noted that he is "attracted" to the fund because of its high distribution rate, large proportion of Qualified Dividend Income (QDI) eligible distributions in the past, moderate interest rate sensitivity relative to peers and a "wide" discount to its NAV (net asset value).

The analyst also pointed out that shares of First Trust are also "attractively valued," given its 9.49 percent discount.

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Latest Ratings for ASC

Jan 2020Stifel NicolausUpgradesHoldBuy
Oct 2019Stifel NicolausDowngradesBuyHold
Aug 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for ASC
View the Latest Analyst Ratings

Posted-In: Alexander Reiss Benjamin Nolan Oil oil tankers OPECAnalyst Color Initiation Analyst Ratings


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GRPNMorgan StanleyMaintains1.5
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