DBS upgrades NOL to hold; target $1.11

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 1.11

DBS Vickers has upgraded Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) to hold from fully valued, with a target price of $1.11 versus $1.15 previously.

DBS said the 50% plunge in NOL’s share price year-to-date has reflected the weak operating environment, but the house expects NOL to perform in line with the broader market at best.

It may be too early to buy the stock because economic indicators remain weak and the freight rate readings remain uninspiring in what is currently supposed to be the peak season, DBS said.

DBS added that the target price of $1.11 is based on 0.8 times price-to-book, but if there is a recession, $0.85 is the objective.

At 11:03 a.m., NOL shares were flat at $1.14.