NOL

NOL: Reporting a good set of operating performance for the first six weeks of 2011, posting a 5%YoY increase in vol and 10%YoY increase in rates. Co. experienced good vol growth in Asia/Europe and intra-Asia, while higher contractual rates on Transpac helped mitigate weakness in Asia/ Europe. Operating results are a good reminder that achieved rates tend to vary materially from spot rates….

Goldman Sachs note that the stock trading at a 13% discount to its peers at 0.88x EV/Fleet Value and Reiterate their Buy call with $3.00 TP, based on 1.23X EV/Fleet Value, assuming a return on fleet of 17.8% in 2011E vs. WACC of 10.0%. Highlight however that Protracted rate declines beyond 2Q11 could have an adverse impact on earnings forecasts. Meanwhile, rising unit costs remain a concern, particularly bunker fuel.