We initiate coverage of Eagle Bulk with a Neutral recommendation and target price of USD 5.5

We find the dry cargo space very interesting and believe that the trough was 1Q16. The share is attractively priced comparative to peers, but we deem its fleet to have strong industrial qualities which is less opportune in the current point of the cycle.

Something that could spark the stagnant and peer-trailing share price into life is further corporate actions (accretive equity issuances & vessel acquisitions) in addition to increased focus from positive investment banker analysts. We do believe the share will outperform peers in the short to medium term, and suggest the hedged dry bulk investor to go long EGLE and short steeper valued peers such as GOGL or SBLK.

Company specifics:

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Market fundamentals:

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 Disclaimer: The publisher currently has no investments in the company
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One thought on “EGLE-US: Initiation (Neutral, TP 5.5)

  1. We received new information today indicating exactly what ships EGLE purchased from Jaccar’s Greenship. There were 13 candidates for the 6+3 purchase agreement, and the full 9 vessels seems on average to be approximately 0.5 years older than our forecast.

    This reduces our NAV by USD 15m to USD 5.85/sh (USD -0.21/sh) and our 1y forward NAV based Target Price to USD 5.4.

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