Tuesday, May 04, 2021
Euroseas Ltd. (ESEA)
Favorable Rate Reset on Oakland, But Risk/Reward Balanced
Euroseas Ltd. provides ocean-going transportation services worldwide. The company owns and operates containerships that transport dry and refrigerated containerized cargoes, including manufactured products and perishables; and drybulk carriers that transport iron ore, coal, grains, bauxite, phosphate, and fertilizers. As of March 31, 2017, it had a fleet of seven containerships; and six drybulk carriers, including three Panamax drybulk carriers, one Handymax drybulk carrier, one Kamsarmax drybulk carrier, and one Ultramax drybulk carrier. The company was founded in 2005 and is based in Maroussi, Greece.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Charter rate reset is positive. Last week, the charter rate on the Oakland, a 2009-built 4,253 TEU intermediate vessel, was reset at ~$38.3k/day, above our estimate of ~$34k/day and well above the current rate of ~$24k. The Oakland is indexed at the Contex 4250 rate of $42.1k/day minus 10%. The reset was the last one prior to the charter expiration in June and we expect either an extension of the current charter or a new charter prior to expiration.
Fine-tuning 2021 EBITDA estimate to reset on the indexed rate. To reflect the positive impact of the Oakland rate reset, we are moving 2021 EBITDA to $35.4 million based on TCE rates of $15.8k/day from $34.9 million based on TCE rates of $15.7k/day …
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.
