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The Zacks Analyst Blog Highlights Dorian LPG, GasLog Partners, Diana Shipping and Flex LNG

For Immediate Release

Chicago, IL – April 26, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Dorian LPG Ltd. LPG, GasLog Partners LP GLOP, Diana Shipping Inc. DSX and Flex LNG Ltd. FLNG.

Here are highlights from Tuesday’s Analyst Blog:

Shipping Stocks Look Attractive Again: 4 Picks

Estimates have been coming down for the Shipping group as analysts had adjusted for demand corrections through last year, as consumers moved from goods consumption to services consumption and supply chain issues eased. Additionally, China was also closed down for a significant portion of the year because of stringent measures to control the spread of COVID.

However, today the situation is quite different. Not only have estimates hit bottom, but China has reopened. The ocean shipping segment is hugely dependent on China because of its being a manufacturing hub and also because it has a significant population, for which a huge volume of goods and services are needed.

Some segments, like iron ore, had suffered a massive setback because China is a major importer. Consequently, this segment is going to come back strongly now that China is back, with the IMF forecasting a 5%-plus growth rate for the economy this year. Additionally, with the Chinese market opening up, travel to and from China and within the country is likely to increase fuel demand, which will account for roughly half the increased demand for oil, and therefore, the vessels shipping the commodity.

Shipping rates are also likely to be stronger this year first, because demand is expected to pick up, even in the event of an economic slowdown in the U.S.; second, because capacity is likely to be tighter with vessel deliveries lagging vessel demand, relatively low new vessel orders, extra shipping miles as Europe sources energy from more distant locations than Russia and grain and other commodities find alternate routes, the effect of environmental/regulatory requirements for lower speeds that will also have a negative impact on available capacity.

On the negative side, there could be fuel price escalation with a corresponding increase in operating costs, although that is not the expectation as of now. Also, European coal imports are expected to decline next year with India and China also focusing on internal consumption thus reducing demand for ocean transit of coal. This will have a negative effect in 2024.

Overall, the outlook for the industry looks pretty strong. Therefore, we would do well to stock up on a few of the players, depending on our budgets and inclinations of course:

Dorian LPG Ltd.

Stamford, CT-based Dorian owns and operates very large gas carriers (VLGCs) for the transportation of liquefied petroleum gas (LPG).

The Zacks Rank #1 (Strong Buy) stock is expected to grow its revenue and earnings a respective 43.1% and 226.3% this year. In the last seven days, its 2023 estimate has jumped 69 cents (18.9%) while the 2024 estimate jumped $1.78 (105.3%). The company reports on May 25, at which time we can expect further updates on its outlook as well as that of the industry.

GasLog Partners LP

Piraeus, Greece-based GasLog Partners acquires, owns and operates liquefied natural gas (LNG) carriers for the transportation of LNG worldwide. As of February 28, 2023, it operated a fleet of 14 LNG carriers.

The Zacks Rank #1 stock is expected to grow its earnings this year, although current estimates represent a small decline in 2024. The estimate revision trend indicates a positive trajectory. In the last 30 days the 2023 estimate increased 10 cents (4.7%) while the 2024 estimate increased 38 cents (33.3%). The company reports on April 27.

Diana Shipping Inc.

Athens, Greece-based Diana Shipping transports a range of dry bulk cargoes, including commodities, such as iron ore, coal, grain and other materials in shipping routes worldwide. As of March 17, 2023, it operated a fleet of 41 dry bulk vessels, including 4 Newcastlemax, 10 Capesize, 5 Post-Panamax, 6 Kamsarmax, 9 Ultramax, and 7 Panamax.

The Zacks Rank #1 stock is expected to see its earnings decline 39% this year followed by 10.8% growth in the next.  In the last 30 days, its 2023 earnings estimate has gone from 75 cents to 83 cents (up 10.7%) while its 2024 estimate went from 77 cents to 92 cents (up 19.5%). The company reports on May 23.

Flex LNG Ltd.

Hamilton, Bermuda-based Flex engages in the seaborne transportation of liquefied natural gas (LNG) worldwide. The company owns and operates vessels with M-type electronically controlled gas injection LNG carriers; and vessels with generation X dual fuel propulsion systems. It also provides chartering services.

The Zacks Rank #2 (Buy) stock is expected to grow revenue and profits in 2023 and 2024 albeit by a low rate. Its estimate revisions have also been moderate (3 cents increase each for 2023 and 2024). The company reports on May 10.

Wrapping Up

Market watchers expect demand to gather momentum in the second half of the year and continue into 2024. There is slight risk to these expectations from the economy, which could take a notable turn for the worse. However, because a lot of the cargo is headed for Asian destinations it may be somewhat insulated from this crisis. Additionally, the IMF expects most economies to grow this year (UK is a significant exception). This is generally positive for shipping companies with their global operations.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Diana Shipping inc. (DSX) : Free Stock Analysis Report

GasLog Partners LP (GLOP) : Free Stock Analysis Report

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Flex LNG Ltd. (FLNG) : Free Stock Analysis Report

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