Eagle Bulk Shipping (Buy, TP: USD63.00) - Focus on capital allocation
In our view, the Q3 DPS of USD2 (~20% dividend yield) underlines the completion of Eagle Bulk’s extensive makeover – setting the stage for focus to shift towards capital allocation. On our estimates, Q4 is set to break Q3’s record results, which should enable yet another quarter of significant dividends. In combination with the USD50m share repurchase programme, this should narrow the gap to our estimated EV/GAV of 0.6x. We reiterate our BUY, but have trimmed our target price to USD63 (65).
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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