BWG (OB:BWLPG) Could Be 10% Below Fair Value After BW Mistral Sale

BWG (OB:BWLPG) is back in focus after BW LPG Limited agreed to sell the 2015 built liquefied petroleum gas carrier BW Mistral, a vessel picked up in the 2024 Avance Gas transaction.

The news around BWG comes after a strong run, with the share price at NOK211.0 and a sharp year to date share price return of 65.23%, even though the 30 day share price return is down 10.37%. The 1 year total shareholder return of 87.56% and the very large 5 year total shareholder return suggest longer term holders have already seen substantial gains.

Scan how BWG compares with other LPG and shipping plays by checking the hand-picked list of solid balance sheet and fundamentals (200 results) that have held up on fundamentals while the cycle has been this strong.

BWG now trades only a small distance below both analyst targets and an internal fair value estimate. After such a strong run, is that narrow gap a cushion or a warning sign for new money?

Most Popular Narrative: 10.2% Undervalued

On the narrative view, BWG screens as undervalued, with a fair value of NOK235 against the last close at NOK211, leaving a modest cushion in the current price.

The narrative was written by DP_invest, an investor in the Simply Wall St Community, who frames BWG around charter rates, dividends and a detailed shipping market backdrop rather than only headline targets.

With an average rate expected at 81,000 USD for Q2, I would expect the dividend for Q2 to be in the 0.97 to 1.05 USD range. Compared to Q1, the average rate was 55,000 USD in Q1 (dividend at 0.67 USD). Unfortunately it looks like status quo for the next 1 to 2 months (minimum) regarding the geopolitical situation in the Middle East, which will bring us into early October to early November.

See why 4 investors see BWG as 10% undervalued.

Result: Fair Value of NOK235 (UNDERVALUED)

Still, BWG relies on freight rates and vessel utilisation, so weaker shipping demand or lower charter income could quickly compress earnings and challenge this valuation story.

Find out about the key risks to this BWG narrative.

Next Steps

With BWG priced close to fair value estimates and sentiment split between optimism and caution, consider acting promptly: review the data and decide where you stand by checking the 2 key rewards and 2 important warning signs.

Looking for more BWG sized opportunities?

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• Hunt for quality at a discount by scanning companies on our 199 high quality undervalued stocks that pair solid fundamentals with prices below their estimated worth.
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