Euroseas (ESEA) – Results below expectations on higher drydocking costs but near-term outlook still bright.

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Friday, May 24, 2024

Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA. Euroseas operates in the container shipping market. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.

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.

Euroseas reported results below expectations mainly due to higher drydocking costs. Vessel utilization and shipping rates were near expectations. With ship repairs completed and new vessels on the way, the company is well positioned to take advantage of an improved shipping rate environment. While the existing fleet is largely chartered out, the addition of four newbuild vessels increases the company’s leverage to shipping rates. 

Management expects some shipping rate softness in 2025 due to the large number of vessel additions industry wide year to date. Shipping rates have benefitted from the conflict in the Red Sea, which has caused ships to take longer routes. Should conflicts abate, rates could weaken as decreased demand for ships is met with additional vessel supply. We would not be surprised to see management increase its 2025 charter position ahead of any weakness.

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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. 


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