UPDATE: J.P. Morgan Upgrades Diana Shipping to Neutral, Raises PT on Reduced Downside Potential

In a report published Friday, J.P. Morgan analyst Christopher G. Combe upgraded the rating on

from Underweight to Neutral, and raised the price target from $9.50 to $10.50. In the report, J.P. Morgan noted, “After a period of relative underperformance, our upgrade reflects reduced downside potential as we roll our DCF-based price target forward to year-end 2014 with a resultant 11% PT increase, implying a modest 3% upside potential. While our estimates and current P/NAV imply c.50% and c.20% respective recovery, downside also appears limited when we employ more modest flat to +25% rate recovery scenarios for 2014 – reflective of still sizeable JPMe 46% TC cover (consensus EBITDA appears to reflect a c.25% recovery). While our current conviction is subdued, we continue to view DSX as a high-quality over-the-cycle drybulk play and would recommend buying on material pullbacks.” Diana Shipping closed on Thursday at $10.18.