NOL

NOL: CLSA has upgraded NOL to a Trading Buy with target price of $1.37 following the recent 9% fall in share price. House believes valuations are now supportive with the shipper company aiming to cut US$500m of costs in addition to declining bunker prices from US$720/tonne to the current 4Q forecast of US$625/tonne and remaing at US$600/tonne in 2013. Expect a 2H earnings momentum to continue into 2013 with 5.4% volume growth and 2.8% higher rates. Seasonally and technically house reckons this is also the right time to buy with a median return of 19% typically by buying in late Nov and selling in May. A small acquisition in logistics is in line with expanding the less volatile part of the business. Forward P/B of 0.86x is approaching 1 std dev below 5-year mean. Street has 10 Buy calls on the stock against 11 Sells with consensus price target of $1.17.