Shares of Dorian (NYSE:LPG) rose as a lot as 10.3% on Monday after Jefferies upgraded its ranking on the LPG transport firm to “Buy” from “Hold” together with a worth goal increase.
The dealer analysis agency modified the value goal on Dorian to $50 from $37.
Jefferies mentioned that the corporate stands to profit from Panama Canal restrictions, which it claims to be a “game-changer in an already tight VLGC market”, and rising U.S. exports, which proceed to underpin the worldwide LPG market.
“The recent Panama Canal restrictions, however, change the outlook considerably, tightening VLGC capacity and raising both spot and forward charter rates. The sector is already underpinned by strong US liquids export growth, which is likely to continue next year,” Jefferies analysts wrote in a November 20 report.
“We are raising our VLGC rate forecast to $75,000/day for 2024, up from $45,000/day. This boosts our Dorian EPS estimate for next fiscal year to $8.67 from $3.68 (consensus is $4.02). Over the next four quarters we project $10/sh of FCF generation. Even assuming a conservative 20% target FCF yield would give Dorian upside to $50,” they added.
LPG inventory has greater than doubled in worth the final 12 months.