Jefferies Cuts Estimates and Price Targets on Maritime Group Due to Weak Tanker Charter Rates (DHT),(FRO),(NAT),(OSG),(SFL),(TK),(TNP)
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Rating Summary:
5 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 11 | New: 8
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Jefferies is cutting a number of its estimates and price targets on shares within its Maritime group coverage.
For the third quarter, the firm is reducing its earnings per share estimates as market checks indicate weaker than expected tanker charter rates for the quarter. Jefferies notes the weaker rates reflect the released IEA government controlled inventories and weak global oil demand.
The firm believes the weaker rates will continue throughout the years end and is also reducing a number of its estimates for the fourth quarter. For 2012, Jefferies forecasts weakness in the global economy will continue to pressure oil demand, which entail will keep tanker charter rates low. The firm also anticipates that the tanker market will remain oversupplied in 2012 as it only expects tanker demand growth to be 2-3 percent.
An analyst at Jefferies highlights, “According to the IEA's most recent Oil Market Report, global oil demand is expected to increase only 1.3 MMbd or approximately 1.4% in 2012 which we estimate is insufficient to necessitate an OPEC production increase next year.”
In the sector, Jefferies prefers Teekay Corporation (NYSE: TK) as it trades at a 35 percent discount to NAV despite its strong balance sheet.
Jefferies is maintaining its Buy rating on shares of DHT Holdings Inc. (NYSE: DHT) while lowering its price target from $4.50 to $2.50. The firm is also reducing its 2011 EPS estimate from $0.20 to $0.16.
Jefferies is maintaining its Hold rating on shares of Frontline Ltd. (NYSE: FRO) while lowering its price target from $6 to $5. The firm is also reducing its 2011 EPS estimate from ($2.14) to ($2.56).
Jefferies is maintaining its Hold rating on shares of Nordic American Tanker Shipping (NYSE: NAT) while lowering its price target from $19 to $15. The firm is also raising its 2011 EPS estimate from ($1.27) to ($1.20).
Jefferies is maintaining its Hold rating on shares of Overseas Shipholding Group (NYSE: OSG) while lowering its price target from $21 to $15. The firm is also reducing its 2011 EPS estimate from ($6.98) to ($7.53).
Jefferies is maintaining its Hold rating on shares of Ship Finance International (NYSE: SFL), but is lowering its price target from $15 to $14.
Jefferies is maintaining its Buy rating on shares of Teekay Corporation (NYSE: TK) while lowering its price target from $41 to $40. The firm is also reducing its 2011 EPS estimate from ($1.57) to ($1.66).
Jefferies is maintaining its Buy rating on shares of Tsakos Energy Navigation (NYSE: TNP) while lowering its price target from $12 to $10. The firm is also tweaking its 2011 and 2012 EPS estimates from ($1.35) ($1.55) to ($1.40) and ($1.22).
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For the third quarter, the firm is reducing its earnings per share estimates as market checks indicate weaker than expected tanker charter rates for the quarter. Jefferies notes the weaker rates reflect the released IEA government controlled inventories and weak global oil demand.
The firm believes the weaker rates will continue throughout the years end and is also reducing a number of its estimates for the fourth quarter. For 2012, Jefferies forecasts weakness in the global economy will continue to pressure oil demand, which entail will keep tanker charter rates low. The firm also anticipates that the tanker market will remain oversupplied in 2012 as it only expects tanker demand growth to be 2-3 percent.
An analyst at Jefferies highlights, “According to the IEA's most recent Oil Market Report, global oil demand is expected to increase only 1.3 MMbd or approximately 1.4% in 2012 which we estimate is insufficient to necessitate an OPEC production increase next year.”
In the sector, Jefferies prefers Teekay Corporation (NYSE: TK) as it trades at a 35 percent discount to NAV despite its strong balance sheet.
Jefferies is maintaining its Buy rating on shares of DHT Holdings Inc. (NYSE: DHT) while lowering its price target from $4.50 to $2.50. The firm is also reducing its 2011 EPS estimate from $0.20 to $0.16.
Jefferies is maintaining its Hold rating on shares of Frontline Ltd. (NYSE: FRO) while lowering its price target from $6 to $5. The firm is also reducing its 2011 EPS estimate from ($2.14) to ($2.56).
Jefferies is maintaining its Hold rating on shares of Nordic American Tanker Shipping (NYSE: NAT) while lowering its price target from $19 to $15. The firm is also raising its 2011 EPS estimate from ($1.27) to ($1.20).
Jefferies is maintaining its Hold rating on shares of Overseas Shipholding Group (NYSE: OSG) while lowering its price target from $21 to $15. The firm is also reducing its 2011 EPS estimate from ($6.98) to ($7.53).
Jefferies is maintaining its Hold rating on shares of Ship Finance International (NYSE: SFL), but is lowering its price target from $15 to $14.
Jefferies is maintaining its Buy rating on shares of Teekay Corporation (NYSE: TK) while lowering its price target from $41 to $40. The firm is also reducing its 2011 EPS estimate from ($1.57) to ($1.66).
Jefferies is maintaining its Buy rating on shares of Tsakos Energy Navigation (NYSE: TNP) while lowering its price target from $12 to $10. The firm is also tweaking its 2011 and 2012 EPS estimates from ($1.35) ($1.55) to ($1.40) and ($1.22).
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