Monday, August 07, 2023
Eagle Bulk Shipping Inc. (“Eagle”) is a US-based drybulk owner-operator focused on the Supramax/Ultramax mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in size; these vessels are equipped with onboard cranes allowing for the self-loading and unloading of cargoes, a feature which distinguishes them from the larger classes of drybulk vessels and provides for greatly enhanced flexibility and versatility- both with respect to cargo diversity and port accessibility. The Company transports a broad range of major and minor bulk cargoes around the world, including coal, grain, ore, pet coke, cement, and fertilizer. Eagle operates out of three offices, Stamford (headquarters), Singapore, and Hamburg, and performs all aspects of vessel management in-house including: commercial, operational, technical, and strategic.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Eagle reported 2023-2Q results that were slightly below expectations. Top-line results were slightly above expectations on higher-than-expected TCE rates (increased premium to index prices), but higher TCE reveues were offset by higher than expected operating costs. Adjusted net income/EPS ($16.7m/$1.13) was above our estimate of $7.7m/$0.47, but that was due to an $11.6m gain on the sale of ships. Absent that gain, earnings would have been $5.2m or $0.32 per share.
Management is betting on the shipping market. During the quarter, the company upgraded its fleet by acquiring two scrubber-fitted ships and selling two non-scrubber ships. It also repurchased 3.8m shares (28% of outstanding) at a cost of $221 million and increased its borrowing capacity by $175m.
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This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
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