Analyst Jonathan Chappell, who covers shipping stocks for the investment bank, upgraded the Herbjorn Hansson-led tanker owner’s shares from “underweight” to “equal weight” and lifted his 12-month price target to $10 from $8.50.
The potential for the suezmax specialist to pay shareholders a greater proportion of its profits in the form of dividends also contributed to the decision.
“We believe that the improving crude tanker market we forecast through 2015 will enable [Nordic American] to begin generating sustainable positive free cash flow again and that a resumption of a 100% payout ratio will add to the total return of the shares over the next 12 months,” Chappell wrote in a note to clients.
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