Eagle Bulk Shipping (Buy, TP: USD63.00) - Attractive yield support
Following a recent downturn in Supramax rates, we have lowered our near-term estimates for Eagle Bulk. We view the current dry bulk headwinds as temporary, as we see potential for a rapid turnaround on rising activity in China, reflecting the tight supply-demand balance facilitated by a meagre orderbook-to-fleet ratio of c7%. Muted forward freight rates point to an 11% earnings yield for 2023e, while our 1-year forward estimates suggest 21%. We reiterate our BUY but have cut our target price to USD63 (66).
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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