Eagle Bulk Shipping (Buy, TP: USD65.00) - Hedging to the rescue in Q4e
In our previous update, we highlighted the potential for a rapid turnaround for dry bulk on rising activity in China. In a matter of weeks, the country has loosened its zero-Covid policy, and we see considerable latent upside potential, reflecting the tight supply-demand balance, supported by a meagre orderbook-to-fleet ratio of c7%. We expect weak Q4 rates to be offset by profitable Q3 hedging activity, delaying soft bookings into Q1; we believe this will likely be in focus in the report. We estimate a 17% earnings yield for 2023–2024. We reiterate our BUY and USD65 target price.
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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