Stolt-Nielsen Ltd. (SNI), the largest operator of chemical tankers, climbed to a six-week high in Oslo as Pareto Securities ASA recommended buying the stock before an expected recovery in parcel tankers that carry liquids.
Stolt-Nielsen, based in London, advanced as much as 1.3 percent to 118.5 kroner, the highest intraday level since Feb. 15, and traded up 0.9 percent by 10:29 a.m. in Oslo. That brings the stock’s gain to 12 percent in the past year.
“Stolt-Nielsen has been through four years of famine as the chemical tanker market is struggling to recover from the financial crisis,” Pareto said today in a note. “Running with only two of three cylinders is challenging, but Stolt-Nielsen has managed to position itself well for a recovery.”
Pareto recommends buying the company and increased its 12- month price estimate on the stock to 150 kroner from 140 kroner.
The chemical shipping market has a smaller glut than crude- oil tankers and dry-bulk carriers because owners ordered fewer new vessels before the global financial crisis.
Contracts with shipyards peaked at 25 percent of current capacity four years ago, compared with 48 percent for oil tankers and 74 percent for bulkers, according to IHS Inc., an Englewood, Colorado-based research company.
Stolt-Nielsen is expected to report first-quarter net income tomorrow of $19.4 million, according to the average of six analyst estimates compiled by Bloomberg. That compares with a profit of $8 million a year earlier.
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