Tag Archives: BULK

BULK-NO (BUY, TP 157) Update: Accretive Fleet Expansion

GoodBulk continues its rapid growth, acquiring seven modern Capesizes from CarVal (Cargill) with options for a further six. We believe the deal is highly accretive to current GoodBulk shareholders (NOK 5.7/sh), with the optionality on six more vessels adding upside. Comparative to recent S&P transactions, we estimate a steel discount of 6-13%. We reiterate our BUY and raise our TP to 157 (153).

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Dry Bulk Sector Update (BUY): Risk/Reward Still Attractive

As we correctly pointed out in mid-April, share prices were likely to be impact from the falling iron ore prices in 2Q. A similar pattern is developing as this report hits the press, and is key to the way forward for rates and shares in 4Q17E. Nevertheless, the low supply growth leaves us confident in the continued cyclical recovery over the next two years, and we reiterate our BUY recommendation on the Dry Bulk sector as we view the risk/reward as highly attractive in a historical context.

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Dry Bulk: Sector Upgraded to BUY

As we argued in our Dry Bulk: Sector Update in early April, share prices had moved too far too fast, disconnecting from the underlying fundamentals of the early expansionary phase of the cycle. We highlighted that the risk was skewed to the downside ahead of 2Q17E, and we issued three SELL recommendations and four Neutral. Since then, share prices have fallen some 30% before recovering somewhat in recent days, hitting or undershooting our target prices. Although share prices could fall even lower in the coming months, a period which is usually marked by a lull in activity ahead of an active Autumn market, we now find the risk/reward highly attractive. We upgrade the dry bulk sector to BUY (Neutral) and assign a BUY rating to nine of the 11 companies we cover.

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BULK-NS: Initiation (BUY, TP 141)

We initiate coverage of GoodBulk with a BUY recommendation and target price of NOK 141. Share price drivers include current undervaluation, increased analyst/investor focus, further fleet growth and improved liquidity/full stock listing.

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