Eagle Bulk Shipping (Buy, TP: USD50.60) - Let the good times roll
Ahead of the Q1 results, we have updated our near-term freight rate estimates, and in turn raised our 2021e EBITDA by 31%. The recent dry bulk strength is increasingly reflected in the FFA curve and quoted timecharter rates, and we thus believe focus will increasingly be on the company securing attractive coverage near-term. On the prevailing FFA curve, we calculate EPS equivalent to c24% of Eagle Bulk’s market cap for 2021e. We reiterate our BUY and have lifted our target price to USD50.6 (38.7).Eagle Bulk Shipping is a holding company. Through its subsidiaries, the company is engaged in the ocean transportation of dry bulk cargoes through the ownership, charter and operation of dry bulk vessels. The company owns a fleet of Supramax/Ultramax dry bulk vessels. Supramax/Ultramax dry bulk vessels are equipped with cargo-handling cranes and grabs. The company provides transportation solutions to a group of customers, including miners, producers, traders, and end users. Typical cargoes the company transports include both bulk cargoes, such as coal, grain, and iron ore, and minor bulk cargoes such as fertilizer, steel products, petcoke, cement, and forest products.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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