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Eagle Bulk Shipping (EGLE) - Hedging Dampened Results But Promising Outlook

Monday, August 09, 2021

Eagle Bulk Shipping (EGLE)
Hedging Dampened Results But Promising Outlook

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.

    Strong 2Q2021 operating results masked by FFA losses. After backing out FFA hedges and other items of $31.6 million, adjusted EBITDA of $62.8 million was well ahead of expectations. TCE revenue of $93 million and TCE rates of $21.6k/day were above expectations, while opex were in line. It was the fourth quarter in a row of improving operating results, after a very tough 1H2020, and the strongest quarter in more than a decade.

    Impressive 3Q2021 forward cover positively impacts 2021 EBITDA and TCE rate estimates.  Moving 2021 EBITDA to $258 million (from $255 million) based on TCE rates of $22.3k/day to reflect higher 2Q2021 results and high forward cover with ~75% of 3Q2021 available days are booked at TCE rates of $28.3k/day versus 71% of 2Q2021 available days booked at $20.1k/day. FYI, the forward cover includes hedging ...

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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