KBC Securities: ‘New investors will discover Euronav’

After months of suspension, KBC Securities resumes monitoring the transforming tanker shipping company Euronav with a buy recommendation and price target of 19 euros. “The storm is over.”

On October 9, 2023, KBC Securities suspended the succession of Euronav. Until then, analysts Wim Lewi and Kristof Samoy had a ‘hold’ rating and a price target of 16.85 euros for the tanker shipping company. The suspension was due to the deal between Frontline and CMB, and more specifically because KBC Securities was an advisor to CMB in the transaction.

Kristof Samoy now resumes the succession of Euronav

– now with a much smaller tanker fleet and clearly on the way to greening and diversification – with a price target of 19 euros and a buy recommendation. “The result of the mandatory takeover bid brought family ownership to 81 percent, indicating that investors need more time to evaluate the strategic turnaround,” he said.

He also thinks that the Saveryses are working sensibly. ‘We think that the new construction orders for green ships are economically sound and not dogmatic.’ The higher debt levels associated with ship orders will be offset by targeted increases in contractual income, diversified cash flows and a discretionary dividend policy, he says.

He also believes that fleet optimization with ships that can also sail on ammonia is healthy, given the lifespan of ships and the possibility of sailing on ammonia when that becomes viable.

He also points out that stricter regulations and lower emissions that customers are seeking will result in high freight rates in the short term and will help green ammonia become a marine fuel in the medium and long term. The forward-looking strategy will Euronav a first mover advantage (pioneer advantage), says Samoy.

Euronav’s recent ship orders indicate confident and rapid execution of the strategy, he continues. ‘The storm is over and a newly assembled armada is sailing towards destination zero (emissions). New investors will discover (Euronav) and some will rediscover the name.”