ANW tgt raised to $10.50 from $9 at Cowen; better Q3 expected, views today's sell-off as an opportunity given a pick-up in shipping activity in Q3
Cowen raises their ANW tgt to $10.50 from $9 following today's sell-off after co reported 2Q numbers below consensus. Cowen views this as an opportunity given a pick up in shipping activity in 3Q, additional clarity on Fujairah and cost savings, and growing return of capital potential. Given the success of cost-saving initiatives, fleet rotation to West Mediterranean markets, and Fujairah start-up marked for 1Q14, the firm is increasingly comfortable with its 2014 FCO est of $1.45/share. With debt repayment and expected capex minimal through 2015, Cowen sees increasing probability for enhanced return of capital initiatives, which it thinks will bring shares to its new $10.50 target.
What kind of risk profile are you talking about? Volumes have been steady and increasing. Spreads are bumpy, but that doesn't really increase the risk profile as spreads also go up. All it means is on a quarterly basis, earnings can be better or worst at times but it averages out.