We initiate coverage of Diana Shipping with a SELL recommendation and target price of USD 3.1
We find the dry bulk space very interesting and believe that the trough was 1Q16. Diana has a prudent approach to the cyclicality of the dry bulk sector, but this time around “slow and steady wins the race” simply did not materialize. With one of the highest cash break evens amongst peers, the liquidity position is of concern. Although priced close to current NAV, we set our Target Price at USD 3.1 (18% downside) as the expected TCE/day is far below P&L break even during the next year.