Riyadh - Mubasher: Al Rajhi Capital Research said that National Shipping Company of Saudi Arabia’s (Bahri) stock price continue to decline following the tanker rate, which was down for the past months.
The share’s price fell 9% in August and 14% in the last three months, according to Al Rajhi Capital report.
The tanker rates may reverse course in Q4 2016 due to strong seasonality, associated with higher crude oil imports during the winter, the report stated.
The investment company believes that Bahri will benefit from high operating leverage as additional VLCCs are commissioned in 2017/18, which will generate around 78% of revenues.
“We factor in lower tanker rates for crude oil transport segment and relatively higher bunker costs (refer to the change in estimates in valuation section) for the next few years, leading to a revised target price of SAR43 per share (SAR45.2 earlier),” the report said.
The research house said it will also maintain its Overweight rating on Bahri.
