Flex LNG downgraded to Underperform from Hold at Jefferies

Jefferies downgraded Flex LNG to Underperform from Hold with a price target of $23, down from $32. The analyst believes the Red Sea diversions are likely to remain in place for an extended period. Given Houthi attacks continue to persist in the region, the likelihood of a return to normal trade flows seems increasingly off the table throughout 2024, the analyst tells investors in a research note. The firm says that while Flex LNG has significant earnings visibility, it carries some market exposure due to a spot-linked contract in its portfolio. The company had maintained a $3 per share annualized dividend, but there is risk to the payout going forward as its free cash flow generation is below the dividend level, contends Jefferies.