Eagle Bulk Shipping Minor model adjustments
We have updated our estimates to reflect the Q2 results, QTD fixtures, and other minor modelling adjustments. Rates have declined on soft volumes, decent supply growth and easing congestion, along with a weaker Chinese demand outlook, which may adversely pressure vessel values until rates recover on the current favourable supply-side fundamentals. Values have already started to tick downwards, with current quotes down ~15% YOY. Meanwhile, Eagle Bulk’s EV/GAV of 0.84x implies a 5-year Supramax value of USD23.5m (versus USD29.5m currently and the USD12m all-time low in 2015–2016). We do not consider our estimate changes to be material, and we have not changed our BUY recommendation. We have trimmed our target price to USD56 (57).
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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