Monday, October 04, 2021
Eagle Bulk Shipping (EGLE)
Strong Operating Results More than Offset FFA Adjustments
Eagle Bulk Shipping Inc. 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.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Hedging program update. Added FFA losses expected in 3Q2021 operating results. Based on September 30th levels, we expect 3Q2021 FFA hedge losses of ~$10 million, including net realized losses of <$1 million and unrealized losses of ~$10 million. Adjusted EBITDA of ~$99 million should be well above 2Q2021, or the fifth straight quarter of higher operating results. We believe that the FFA hedging program dampens TCE rate volatility and creates added optionality since operating control is retained.
Moving up EBITDA estimates. 2021 EBITDA to $304 million based on TCE rates of $22.3k/day to reflect elevated TCE rates. Forward cover of ~75% of 3Q2021 days booked at TCE rates of $28.3k/day was impressive, but TCE rates have moved up into the $35k/day range. 2022 EBITDA also moves higher to $311 million based on TCE rates of $23.9k/day. FYI, forward cover and EBITDA estimates include estimated …
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
