Monday, May 9, 2011

NOL up on improving container sector outlook

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: CIMB

Shares of Singapore-listed container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) rose as much as 4.4% on Monday as analysts expect improving volumes and rates on the back of higher demand from the U.S. and Europe.

NOL is slated to release its first quarter result on Friday.

DnB NOR Markets said it expects the firm to be hurt by greater operating costs, which were mainly due to higher bunker prices and slightly lower-than-expected rates, but this weakness appears to have been factored into the share price.
The brokerage has a buy rating and a target price of $2.13 on NOL stock.
At midday, NOL shares were trading at $1.92 on a volume of 14.3 million shares. The stock has fallen around 12% so far this year.
NOL said last week it carried 12% more cargo in the four weeks to April 8 from a year ago, helped by higher traffic on intra-Asia and Asia-Europe routes.
CIMB Research said it expects container shipping rates to resume their uptrend in the second half this year and continue into 2012. The brokerage has an outperform rating and a target price of $2.45 on NOL.

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