Star Bulk (Buy, TP: USD31.00) - 20% > consensus 2023e EBITDA
We expect current market tailwinds to intensify, and view the market as too conservative in its assessment of the tangible demand growth acceleration from China and the record-low orderbook-to-fleet ratio. Capesize FFAs for Q2–Q4 have already rebounded, up 40% YTD to USD20.7k/day, on which Star Bulk’s scrubber-fitted fleet is primed to earn a premium with meaningful shareholder return potential of a 25% 2023–2025e dividend yield from its cash-oriented payout policy. We reiterate our BUY and USD31 target price.Star Bulk Carriers is an international company providing worldwide transportation solutions in the drybulk sector through its vessels-owning subsidiaries for a range of customers of major and minor bulk cargoes including iron ore, coal, grain, cement, fertilizer, along worldwide shipping routes. As of Dec 31 2016, Co. owned and operated a fleet of 73 vessels consisting primarily of Newcastlemax, Capesize as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 dwt and 209,537 dwt. Co.'s vessels transport a range of major and minor bulk commodities, including ores, coal, grains and fertilizers, along worldwide shipping routes.
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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