NAT - Nordic American Tankers: Downgrading On Disappointing Q1 And Lack Of Guidance

2024-05-30 10:32:41 ET

Summary

• Nordic American Tankers Limited's operational performance continued to underperform peers by a wide margin in Q1/2024.
• On the flip side, the company still managed to generate $37.6 million in cash from operating activities and continued its generous dividend policy.
• The weak operating performance has impacted investor sentiment, with the stock price now down year-to-date despite a massive rally in virtually all other major U.S. exchange-listed tanker stocks.
• Management's decision to abstain from providing preliminary TCE guidance for the first time in recent history doesn't bode well for the company's Q2 results. A dividend reduction might be in the cards.
• Consequently, I am downgrading Nordic American Tankers stock from "Buy" to "Hold" with a price target of $4 based on an assigned 10% discount to net asset value to account for the company's persistent operational issues.

Note:

I have covered Nordic American Tankers Limited ( NAT ) previously, so investors should view this as an update to my earlier articles on the company. ...

For further details see: