Ship Finance International (SFL) PT Raised to $16 at BTIG

BTIG analyst Gregory Lewis raised the price target on Ship Finance International (NYSE: SFL) to $16.00 (from $15.00) while maintaining a Buy rating.

The analyst commented: "SFL reported 1Q24 earnings (BMO) with adjusted EBITDA of ~$152M (includes ~$8M in associated income) coming ~19% above consensus of ~$127M (~11% above BTIG). EBITDA was up ~15% sequentially and up ~37% Y-Y. The company raised its dividend by $0.01 to $0.27, offering an ~8% annualized yield. The dividend represents a ~33% payout of operating cash flow (vs. a ~43% payout in 2023), which suggests SFL has room to continue increasing its dividend over time. Shifting to the fleet, SFL acquired three LR2 newbuilds from a third party affiliate for an aggregate ~$230M. The tankers will begin 5-year timecharters upon delivery (expected between 2Q24 and 4Q24) that add ~$200M to SFL's backlog, pointing to an average dayrate of ~$37k. Looking across the rest of the portfolio, SFL fixed three ~10.6k TEU containerships on 5-year charters (adds ~$210M to backlog) with Maersk as well as a feeder vessel after quarter-end. The liner also extended three more containerships between 8.7-9.5 TEU (adds ~$30M). During the quarter, SFL also took delivery of two car carriers during the quarter, which are both under 10-year charters. Bottom Line: SFL is increasing its operating cash flow through combination of strategic fleet growth and long-term timecharters, which should support continued dividend growth. We reiterate our Buy rating."

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