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Here's Why Investors Should Avoid Dorian LPG Stock for Now
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Dorian LPG Limited (LPG - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for third-quarter 2024 earnings has been revised 77.2% downward in the past 60 days. For 2024 and 2025, the consensus mark for earnings has moved 12.5% and 32.5% south, respectively, at the same time. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.
Zacks Rank: Dorian LPG currently carries a Zacks Rank #5 (Strong Sell).
LPG’s Unimpressive Price Performance: LPG has lost 21.6% year to date against the industry’s growth of 24.5%.
YTD Price Comparison chart
Image Source: Zacks Investment Research
Unattractive Valuation: Shares of the company are not cheap. LPG is trading at a forward price/earnings of 3.47x, higher than the industry's average of 2.23x and above its five-year low of 2.82x. It has a Value Score of C.
Image Source: Zacks Investment Research
Unfavorable VLGC market: Dorian LPG owns 21 very large gas carriers (VLGCs). The market fundamentals of the VLGC market are not attractive. The VLGC order book is 32%. Vessels older than 20 years represent 14%. A high-order book implies that the VLGC market is likely to experience a supply glut shortly. Resolution of the Red-Sea crisis is likely to hurt VLGC ton miles, pushing day rates down.
CHRW has an expected earnings growth rate of 25.2% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 29% in the past year.
WAB carries a Zacks Rank #2 at present and has an expected earnings growth rate of 26% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once. The average beat is 11.8%. Shares of WAB have climbed 72.7% in the past year.
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Here's Why Investors Should Avoid Dorian LPG Stock for Now
Dorian LPG Limited (LPG - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for third-quarter 2024 earnings has been revised 77.2% downward in the past 60 days. For 2024 and 2025, the consensus mark for earnings has moved 12.5% and 32.5% south, respectively, at the same time. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.
Zacks Rank: Dorian LPG currently carries a Zacks Rank #5 (Strong Sell).
LPG’s Unimpressive Price Performance: LPG has lost 21.6% year to date against the industry’s growth of 24.5%.
YTD Price Comparison chart
Unattractive Valuation: Shares of the company are not cheap. LPG is trading at a forward price/earnings of 3.47x, higher than the industry's average of 2.23x and above its five-year low of 2.82x. It has a Value Score of C.
Unfavorable VLGC market: Dorian LPG owns 21 very large gas carriers (VLGCs). The market fundamentals of the VLGC market are not attractive. The VLGC order book is 32%. Vessels older than 20 years represent 14%. A high-order book implies that the VLGC market is likely to experience a supply glut shortly. Resolution of the Red-Sea crisis is likely to hurt VLGC ton miles, pushing day rates down.
Stocks to Consider
Investors interested in the Zacks Transportation sector may consider C.H. Robinson Worldwide (CHRW - Free Report) and Westinghouse Air Brake Technologies (WAB - Free Report) .
C.H. Robinson Worldwide currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CHRW has an expected earnings growth rate of 25.2% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 29% in the past year.
WAB carries a Zacks Rank #2 at present and has an expected earnings growth rate of 26% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once. The average beat is 11.8%. Shares of WAB have climbed 72.7% in the past year.