Assessing BW LPG (OB:BWLPG)’s Valuation After Q3 Earnings Drop and New 2025 Dividend Approval

BWG (OB:BWLPG) just delivered a mixed update, with third quarter earnings down sharply from last year but a fresh cash dividend for 2025 signaling the board is still comfortable rewarding shareholders.

See our latest analysis for BWG.

The latest earnings drop seems to have cooled sentiment, with the share price at NOK 124.5 after a 1 month share price return of negative 7.98 percent and a 3 month share price return of negative 18.25 percent. Yet the 1 year total shareholder return of 10.34 percent, and especially the 3 year and 5 year total shareholder returns of 170.08 percent and 363.10 percent respectively, suggest the longer term story remains strongly positive even as near term momentum fades.

If BWG’s recent pullback has you reassessing opportunities in shipping and beyond, it could be a good moment to broaden your search and explore fast growing stocks with high insider ownership.

With profits sliding but dividends still flowing and the share price trading at a discount to analyst targets, is BWG quietly undervalued here, or is the market already baking in softer earnings and slower growth?

Most Popular Narrative: 24% Undervalued

With BWG last closing at NOK 124.5 against a narrative fair value of NOK 163.88, the most widely followed outlook points to a sizeable upside gap that hinges on specific long term earnings and margin assumptions.

The company's recent acquisition of Avance Gas vessels has enhanced its position as a leading VLGC operator, which could improve fleet synergies, reduce costs, and positively impact net margins.

The introduction of LPG dual fuel propulsion technology on a significant portion of the fleet may lead to cost savings and efficiency improvements, thereby enhancing net margins.

Read the complete narrative.

Curious how shrinking revenues can still support a higher value than today? The narrative leans on powerful margin expansion and a richer future earnings multiple. Want to see the full playbook behind that call?

Result: Fair Value of $163.88 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lower VLGC spot rates and higher leverage could quickly erode earnings resilience, challenging the upbeat margin assumptions behind that undervaluation story.

Find out about the key risks to this BWG narrative.

Build Your Own BWG Narrative

If you see the numbers differently or want to test your own assumptions, you can build a customized narrative in just a few minutes: Do it your way.

A great starting point for your BWG research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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