Dorian LPG ( NYSE: LPG ) -9.6% in Thursday's trading after UBS downgraded shares of the energy shipping company to Neutral from Buy with a $19 price target, expecting 2023 liquefied petroleum gas fleet capacity growth will outpace the LPG ton-mile trade.
"The transitory impact of shipping inefficiencies and the oversupply of LPG tonnage on the horizon should drive latent capacity into '23 and will likely drive down spot rates and result in range-bound price into '23," according to UBS analyst Brian Reynolds.
The analyst also noted the 45 VLGC's expected to come online in 2023 is "the highest we have seen since 44 came online in 2016, which resulted in oversupply in the global LPG tonnage which took a few years to work through."
Dorian LPG ( LPG ) shares rallied ~50% in the three months between late September and late December, "partly driven by the global energy shortage spilling over into the much smaller and often forgotten LPG industry," DT Analysis writes in an analysis posted recently on Seeking Alpha .
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Dorian LPG plunges after UBS downgrades, seeing fleet oversupply on the horizon