Eagle Bulk Shipping (Hold, TP: USD58.00) - Star Bulk shares potentially incoming
Eagle Bulk’s NAV has risen to ~USD79/share on strong vessel values and potentially solid Q4 cash flow, while the share price remains pegged to the takeover offer by Star Bulk. The transaction is estimated to net Eagle Bulk’s shareholders ~USD74/share of the potentially combined entity’s prorated NAV, or USD58/share based on the last closing price of Star Bulk shares. The possibility to unlock at least USD50m in annual cost and revenue synergies provides further upside potential, in our view. We have downgraded to HOLD (BUY) but have raised our target price to USD58 (48).
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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