Four Shipping Companies Upgraded By ING
It looks as though the notoriously cyclical shipping sector is heading back up the mountain, as last week one of the world's prestigious financial firms stamped four companies with an investment ratings uprade. ING Barings last Wednesday raised its ratings on four shipping companies to strong buy from buy. Analyst Stephen Gengaro raised his ratings on shares of Frontline Ltd., OMI Corp., Overseas Shipping Group and Teekay Shipping. Frontline was raised to a strong buy from buy and Gengaro's 2000 and 2001 estimates to $1.60 from 40 cents and to $2.35 from $1.00 to reflect the company's "tremendous" leverage to rising time-charter equivalent (TCE) rates for its very large crude carriers (VLCC) tankers.
ING Barings Raises Rating On 4 Shipping Companies
ING Barings raised its ratings on four shipping companies to strong buy from buy. Analyst Stephen Gengaro raised his ratings on shares of Frontline Ltd. to a strong buy from buy to reflect the company's "tremendous" leverage to rising time-charter equivalent (TCE) rates for its very large crude carriers (VLCC) tankers. The rating on shares of international tanker owner OMI Corp. was raised to strong buy from buy, with revised estimates reflecting upward revisions to his rate assumptions for company's crude tanker and product tanker fleets. The rating on shares of Overseas Shipping Group was raised to strong buy from buy with a $30 price target based on 7.5 times the midpoint of his peak earnings estimate and peak pretax earnings per share estimate.
ING Raises Ratings On Oil Companies
ING Barings has raised its ratings of the shares of several oil and gas companies. ING raised Burlington Resources to strong buy from hold, Transocean Offshore to strong buy from buy and Ocean Energy Inc. to buy from hold. On Transocean, analyst Stephen Gengaro wrote: "We believe the stock has lagged the group because of the relatively high level of contract rollovers over the next six months, which includes some of the company's high-specification semis currently working at high day rates. "While these rollovers will likely keep pressure on earnings over the next several quarters, we do not expect the company to sign any long-term contracts…
OSG Raised To “Buy”
ING Barings analyst Stephen Gengaro raised his rating of shipowner Overseas Shipholding Group Inc. to buy from hold and set a 12-month price target of $28 to $30. In a research note, he raised his 2000 earnings per share estimate to 75 cents from 20 cents and initiated a 2001 EPS estimate of $1.25. He is maintaining his 1999 EPS estimate at 14 cents. Gengaro maintains a bullish outlook for international tankers and believes the current tanker industry fundamentals are the strongest since the mid-1980s. He said New York-based OSG has realized surprisingly solid earnings in very weak market conditions and has yielded about $40 million in cost savings over the past year.
