Safe Bulkers Minor model adjustments
We have updated our estimates following the company’s Q4 report and revised employment profile. Hence, we have raised our 2025e EBITDA by 3%, maintained our 2026e, and introduced our 2027e. While dry bulk fundamentals remain challenging, Safe Bulkers’ deep discount to underlying values (P/NAV of 0.43x), healthy contract backlog, and therefore less downside risk to consensus estimates, leave a more favourable risk/reward than its dry bulk peers, we believe. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our USD4.2 target price.Safe Bulkers is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes for consumers of marine drybulk transportation services. As of Feb. 9, 2018, Co. had a fleet of 39 drybulk vessels, with an aggregate carrying capacity of 3,513,800 dwt and an average age of 7.6 years. Co. deploys its vessels on both period time charters and spot time charters. The vessels on period time charters provide Co. with relatively stable cash flow and utilization rates, while the vessels in the spot market allow Co. to maintain its flexibility in low charter market conditions.
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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