UPDATE: UBS Downgrades Dorian LPG Ltd. (LPG) to Neutral

UBS downgraded Dorian LPG Ltd. (NYSE: LPG) from Buy to Neutral with a price target of $12.50 (from $19.) The change was tied to a lower rate forecast.

Analyst Spiro M. Dounis explained, "While we always expected rates to moderate as new supply enters the market, the downturn has been steeper than we expected. Accordingly, we revised our estimate of NAV lower to reflect declining vessel values as owners recalibrate what they are willing to pay for a VLGC in a lower rate environment."

"We believe narrow geographic spreads and seasonality have driven the recent sharp decline in VLGC rates. While we expect spreads to widen again and incentivize exports, new supply will constantly be hitting the water all year. With more vessels competing for cargos, VLGC rates may hit a ceiling quicker than history would suggest when the spreads widen," added the analsyt.

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 $11.38 yesterday.

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