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 facilita...

Star Bulk (Hold, TP: USD15.50) - Cash flow for DPS drying up in Q1e

We see ~30% downside risk to dry bulk asset values on historical EV/EBITDA multiples and the prevailing 1-year TCs. Thus, given our muted near-term outlook on the dry bulk segment, we believe valuations must converge lower. However, at Star Bulk’s heavily discounted 0.67x EV/GAV (bulker peer group: 0.72x), we believe much of the downside risk is priced in and leaves a fair risk/reward, despite the risk of no DPS in Q1 for the first time since 2020. Hence, we reiterate our HOLD but have lowered o...

Genco Shipping & Trading (Buy, TP: USD15.10) - Attractive discount

We have not changed our muted stance on the near-term outlook for the dry bulk segment, and see ~30% downside risk to current asset valuations on the prevailing 1-year TCs. However, Genco’s close to 50% discount to underlying values (EV/GAV 0.53x) seems overdone and represents an attractive entry point, we believe. We have upgraded to BUY (HOLD), but have lowered our target price to USD15.1 (15.4).

Another abrupt change

The US Trade Representative on 17 April published revised US port fees with significant changes to the initial proposal based on industry feedback. In its current form, the fees will primarily discourage use of Chinese-controlled maritime trade services to the US, and directly affect the use of Chinese-built vessels in US ports (with several considerable exemptions to avoid harm to US trade). The previous broader fees based on fleet composition and share of Chinese-built vessels has been scrappe...

Hexagon Composites (Buy, TP: NOK38.00) - Cautious on near-term outlook

We are significantly below consensus on Q1e EBITDA, owing to the challenging US truck market, with the uncertainty in demand, costs, and regulations resulting in lower demand for new trucks and technology shifts taking longer. With most of its business in the US, we consider Hexagon Composites vulnerable. As a result, we have lowered our 2025–2026e EBITDA by 9–15%. We reiterate our BUY, but have cut our target price to NOK38 (50) on the weaker near-term outlook.

‘The times they are a-changin’

The recurring theme at our 18th Energy & Shipping Conference was geopolitical uncertainty and a potential trade war, warranting a wait-and-see approach, particularly on the Trump 2.0 effect. The consensus view pointed to high asset values, with no rush to the yards, aligning with below-NAV valuations across most of our coverage. However, panellists generally saw less downside risk than the 25% average discount to steel for our Tanker, Dry Bulk and Gas coverage. Overall, the day highlighted uncer...

Genco Shipping & Trading (Hold, TP: USD15.40) - Solid footing; demandi...

We continue to see challenging fundamentals for dry bulk near-term and downside risk to elevated asset valuations. However, Genco’s ~40% discount to underlying values compares favourably to its less discounted peers and removes much of the downside risk, we believe. Also, using its solid financial position and flexibility, we expect the company to sustain dividends through what looks likely to be a challenging H1. In sum, we still see the risk/reward as balanced and reiterate our HOLD. We have l...

Renewable Weekly – 20 February 2025

This week, we summarise this week's most important newsflow on the companies under our coverage.

Star Bulk Minor model adjustments

We have updated our estimates following Star Bulk’s Q4 report, Q1 bookings, and other minor model adjustments. We have lowered our 2025e EBITDA by 3%, maintained our 2026e, and introduced our 2027e. The company remains notably discounted to underlying values (P/NAV of 0.61x), but we continue to believe the dry bulk market will be challenged by weak fundamentals despite seasonal tailwinds from here. We expect continued downward pressure on still-elevated consensus, making for a balanced risk/rewa...

Energy Morning - 14 February 2025

Hexagon Composites (Buy, TP: NOK50.00) - In a transition year

2025 looks set to be a transition year, with a slower roll-out of natural gas trucks and low Mobile Pipeline activity hampering H1. Thus, we have cut our 2025e EBITDA by 24%, to the top of the guidance of NOK640m–740m that we consider to be conservative. Seeing the long-term investment case as still intact and hearing welcomed commentary on no further financial support to Hexagon Purus, we consider yesterday’s sell-off to be an overreaction. We reiterate our BUY, but have cut our target price to...

Strong finish, but soft 2025 outlook

Energy Morning - 13 February 2025

Energy Morning - 7 February 2025

Set for a strong finish

A playbook on US tariffs

As a response to recent news flow of potential tariffs and countermeasures, we highlight the main implications for the shipping sectors we cover. While the specifics remain uncertain, the below input might assist in gauging potential impacts of the disruptions.