Deutsche upgrades NOL to hold; target $1.04

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED

Research House: Deutsche Bank

Price Call: HOLD

Target Price: 1.04

Deutsche Bank has upgraded Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) to hold from sell on a 12-month basis with a target price of $1.04.

Deutsche said it expects the container shipping sector to dip into the red in 2011, and that earnings estimates for container shippers by most analysts are still too bullish despite recent downgrades.

But with rates likely to fall in the next one to two quarters, carriers will be forced to be disciplined as their cash flows turn negative. This will in turn help lift rates.

At 9:11 a.m., NOL shares were down 4% at $1.095. The stock has fallen around 50% so far this year.