Star Bulk Minor model adjustments
We have updated our estimates on Star Bulk’s Q1 actual results, QTD fixtures and revised fuel spreads. We note that the stock continues to diverge from net asset values and freight rates, and see Star Bulk advantageously discounted at a 0.70x P/NAV, albeit at strong asset values (resale Capesize quotes up 25% YTD). Capesize Q2–Q4 FFAs are up 30% YTD to cUSD18k/day, with more upside potential to our estimate of USD27.2k/day, implying a 25% dividend yield on 2023e payouts. We estimate the stock is trading at a 2024–2025 dividend yield of 32%. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our 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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