BofA Global Research affirmed its investment case for ADNOC Logistics & Services (ADX:ADNOCLS) after its first-quarter earnings report, noting the Abu Dhabi-listed energy maritime logistics company's "still conservative" full-year 2026 outlook upgrade.
"ADNOC L&S reported a 4% EBITDA miss versus consensus, primarily driven by the booking of over US$20mn of expected credit losses, reflecting prudent accounting. The quarter was also impacted by the ongoing regional conflict, which led to lower volumes in the integrated logistics business. The shipping segment, however, performed well, with the majority of vessels employed outside the Strait of Hormuz. With shipping rates for both crude and product tankers running above 1Q averages so far in 2Q, we expect ADNOC L&S to deliver a stronger 2Q26 performance. We reiterate our Buy with a [price objective] of AED7.20 and revise our estimates accordingly," according to a May 15 note.
Alongside its first-quarter results, management upgraded the company's 2026 guidance, with revenue reduction now projected at a low-to-mid single-digit versus the previous mid-single-digit year-on-year cut, while the expected EBITDA growth moved to mid-to-high single digits from low-to-mid single-digit. ADNOC Logistics & Services said the updated outlook remains "conservative", based on the assumption of "minimum activity levels" due to regional uncertainty.
Meanwhile, the research firm forecasts a 24% EBITDA increase for full-year 2026 amid expectations of shipping spot rates normalizing from recent highs and integrated logistics volumes recovering in the second half of the year. "Medium term, we see ADNOC L&S as a key beneficiary of ADNOC's planned production and production capacity increases, which are not yet reflected in current estimates," BofA added.