Diana Shipping Shares Moving Off Vote Of Confidence From Deutsche Bank
In a report published Monday, Deutsche Bank analyst Amit Mehrotra upgraded the rating on Diana Shipping Inc (NYSE: DSX) from Hold to Buy, with a price target of $8.
In the report Deutsche Bank noted, "Our analysis to-date on dry bulk companies has largely been based on vessel rates and operating results, with little attention to net asset value (NAV) given our view that it has limited predictive power for dry bulk stocks in a fast moving market."
However, dry bulk rates now appear to have bottomed. Moreover, there has been a significant decline in asset values and companies are "addressing cash calls." All these factors are necessary for NAV to "become a better gauge of underlying value," Mehrotra said.
With equity values having "overshot to the downside," the analyst expects Diana Shipping's shares to now trade at "true" NAV. Moreover, the company is among the few with the balance sheet to "pursue transactions accretive to equity value."
The price target represents a 30 percent premium to conservative NAV, reflecting the company's "underleveraged balance sheet," Mehrotra stated, while adding, "…we believe will be deployed in the coming months/quarters towards assets at prices accretive to equity value."
Latest Ratings for DSX
|Aug 2016||Deutsche Bank||Upgrades||Sell||Hold|
|Aug 2016||Seaport Global||Assumes||Neutral|
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