Genco Shipping & Trading Minor model adjustments
We have updated our estimates for the company’s Q1 results and other minor model adjustments. Hence, we have raised our 2025–2026e EBITDA by 1%, while we lowered our 2027e by 1%. We maintain that Genco’s steep discount to underlying values (0.57x EV/GAV) more than offsets the downside risk to our muted near-term outlook for the dry bulk segment and the entailing risk of negative momentum in asset valuations. Further, the company demonstrated an ability to adjust its quarterly reserve to facilitate a Q1 DPS of USD0.15 in a loss-making quarter, while any buybacks from its new USD50m share repurchase programme should be accretive, given the current valuation. In sum, we find potential skewed to the upside. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have lowered our target price from USD15.1 to USD15.0.
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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