NOL

NOL: is +2.4% at $1.07, retracing some of its 5.4% drop Monday. Deutsche notes, the market has been taking too pessimistic a view on NOL, without giving it any credit for YTD rate rises, erasing the stock's gains since Dec. The house notes, the recent 1Q12 results don't really reflect the industry's rate increases in Mar, but they will be more evident in 2Q. However, despite the rate increases, mgt expects 2Q performance to be weak (interprets to mean NOL is struggling to break even) because of higher fuel costs. But while the house is disappointed on the 2Q outlook, it still expects it to be materially better than 1Q, with further improvement in 3Q. Adds, bunker fuel cost appears to be retreating, down 9% from YTD highs. Trims its target by 8% to $1.55 to factor in expectations the SGD will strengthen further, but keeps a Buy call. Nov lows around $1.00 likely offer support, while the $1.10-zone may offer resistance.