UBS Cuts Price Target on Dorian LPG (LPG) to $6.50; Remains Sidelined

October 4, 2016 7:46 AM EDT
Get Alerts LPG Hot Sheet
Price: $9.50 +1.71%

Rating Summary:
    3 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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UBS maintained a Neutral rating on Dorian LPG Ltd. (NYSE: LPG), and cut the price target to $6.50 (from $8.00), as VLGC rate environment continues to see challenges. Vessel rates averaged ~$12,000/d QTD compared to ~$20,000/d last quarter. Seasonality and wider arbs may lift rates. However, an expected 18% increase to the overall VLGC fleet through 2017 may offset potential positive catalysts.

Analyst Spiro Dounis commented, "We lower our NAV-derived PT to $6.50 from $8.00 to reflect an ongoing challenged VLGC rate environment. We believe a wider discount to NAV is now justified as rates struggle to find a floor and begin a recovery. Since our last update peer discounts to NAV have widened by 0.2x. Based on historical cycles, we expect VLGC rates to remain low but gradually approach the 10-yr average over the next 18 months, this is longer than we originally expected (~6 months)."

For an analyst ratings summary and ratings history on Dorian LPG Ltd. click here. For more ratings news on Dorian LPG Ltd. click here.

Shares of Dorian LPG Ltd. closed at $6.27 yesterday.

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