NOL

NOL: Credit Suisse upgrades to Outperform from neutral, raises target to $2.43 from $2.35. Ups FY10-12E earnings forecast by 7-17% to reflect improving freight rates (+12% qoq), better than expected ytd run rates. Tips strong 3Q10 earnings of >US$260m vs US$100m in 2Q10, thanks to successful Transpacific rate hike in late 2Q. This compares with 3Q consensus est which appear low averaging ~US$200m...

Views positively NOL’s order of 12 new 10.7k TEU ships at 20-30% below peak prices, says deliveries in 2012 timely as industry supply growth would be shrinking by then, and NOL would have returned the bulk of its more expensive chartered-in vessels. Believes P/B should trade closer to previous peak-cycle multiple of 1.4x, based on projected FY10-11E ROAE of 14-16%, above the 10-yr historical avg of 11%.