NOL

NOL: CS downgrades to Neutral and slashes TP to $1.23 from $1.40, Weaker 3Q11 freight rates, and P/B not low enough despite recent correction.

Add that this year’s peak season has started late but finished earlier-than expected on weaker cargo volume and oversupply concerns. On lower rate assumptions, expect NOL to record a net loss of US$121 m in FY11E, followed by a small profit of US$107m in FY12E and US$310m in FY13E.
If rates fail to rebound in FY12E, NOL could report further losses. NOL is on 0.8x forward P/B, 1 SD below its historical avg, but still 35% above the 2008-09 trough. Compared to its peers, its valuation is not attractive enough.