Tuesday, October 12, 2021
EuroDry (EDRY)
Upward Bias Intact – Raising EBITDA Estimates
EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands and trades on the NASDAQ Capital Market under the ticker EDRY. EDRY is the product of a spin-off of the dry bulk fleet by Euroseas (ESEA) completed in May 2018. For every five ESEA shares, ESEA shareholders received one EDRY share. There are currently ~2.2 million EDRY shares outstanding. EuroDry operates in the dry bulk shipping markets. EuroDry’s operations are managed by Eurobulk Ltd., an affiliated ship management company, and Eurobulk FE (Far East) Ltd, which are responsible for the day-to-day commercial and technical management and operation of the fleet. EuroDry employs the fleet on spot and period charters and through pool arrangements.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Dry bulk market thesis intact. Hard to avoid volatility, but intermediate outlook remains promising. Dry bulk TCE rates moving higher on firm demand plus port congestion and coal shortages. Also, the order book remains muted, and the new carbon emission regulations (EEXI) in January 2023 could trigger slow steaming that effectively lowers supply. While Chinese industry could be curtailed ahead of 2022 Winter Olympics and volatility/seasonality is possible, there is no doubt that dry bulk bulk rates have been higher than expected. Comments from today’s Capital Link Dry Bulk Sector Panel should support our view.
Increasing 2021 EBITDA estimate to reflect acquisitions, recent time charters and index rate adjustments. To reflect acquisitions and higher TCE rate estimates, we are moving 2021 EBITDA to $45.5 million based on TCE rates of $25.3k/day. The Blessed Luck was already in our estimate so the Good Heart and higher rates account for the estimate increase …
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.
