UBS starts BW LPG at 'buy' on improving macro, peer leading metrics

BW LPG

18/10/2021 14:52

** UBS initiates Singapore-based investment holding company
BW LPG  BWLPG.OL  with "buy", seeing a NAV gap inflection point
with the NAV discount narrowing to 30% from 50% 
    ** Improving LPG shipping fundamentals, solid balance sheet
and return of shareholders returns help the gap to narrow, UBS
says 
    ** It also points to a "misunderstanding" around recent
stake stale by the BW Group, the parent company, inducing a
share depreciation, whereas parent liquidity purposes were the
transaction's rationale
    ** "The combination of a supportive macro backdrop and micro
factors gives us confidence in our view of 2.6:1 risk to the
upside" - UBS
    ** "LPG supply outpacing LPG fleet growth over the
near/medium term underpins the investment thesis," UBS adds,
saying elevated utilization levels present pricing risk to the
upside
    ** The brokerage also expects BW LPG's vessels retrofit
strategy to lead to higher returns and improvement in ESG scores
    ** All six analysts covering BW LPG rate it "strong buy/buy"
    

 (Reporting by Ina Kreutz)
 ((ina.kreutz@thomsonreuters.com))