- Frontline (NYSE:FRO) -3.8% pre-market after Wells Fargo (NYSE:WFC) downgrades shares to Market Perform from Outperform with a $5.50 price target, cut from $7, as the high level of volatility in equities and commodities limits "realistic" potential upside.
- The downgrade is one of several in the shipping sector, which Wells analyst Michael Webber sees as range-bound through most of H1 as the market is in part of the cycle where "macro simply drives the bus."
- Along with FRO, the firm cuts KEX, DHT, TNK, NVGS, CPLP and TOO to Market Perform from Outperform.
- Tanker stocks have traded off with rest of the energy space, which Webber says places the group in an interesting position: cheaper price/NAV multiples and a softer 2019 outlook but still "enough long-term juice" to warrant a gradual move back to mid-cycle values.
- Webber also says he remains constructive on the secular buildout of liquefied natural gas export infrastructure including GLNG, GLOG, GLOP, LNG and CQP.
- Now read: Golar LNG Partners: Solid Quarter, Likely To Improve
Original article