Market Overview

Sell Diana Shipping, Deutsche Bank Warns


Deutsche Bank’s Amit Mehrotra Diana Shipping Inc. (NYSE: DSX) downgraded the rating on the company from Hold to Sell, while lowering the price target from $4.00 to $1.50.

Cash Burn Concerns

The downgrade in the rating follows the company’s recent rechartering announcements and a meeting with the COO and CFO on March 8.

Mentioning that Diana Shipping’s negative cash flows were more severe than earlier expected, Mehrotra now expects the company to burn $175 million in 2016 and $100 million in 2017, “reflecting the significant step down in dry bulk rates ytd and exacerbated by DSX's period chartering strategy.”

“We do not believe DSX has the liquidity and/or leverage profile to absorb such a hit, most likely necessitating near/mid-term debt relief,” the analyst said.

Diana Shipping has cash worth $170 million and more than 70 percent LTV, reflecting lower asset values and net debt having doubled over the past two years, with management having invested during the downturn.

Positive Outcome Likely

“Importantly, we are confident in DSX’s ability to absorb operating-related cash burn, implying the company is most in need of relief related to the timing of debt repayments,” the Deutsche Bank report stated.

The analyst believes, however that management would be successful in negotiating a positive outcome with lenders, although the discussions were likely to be rendered tougher due to Diana Shipping’s best-in-class status.

Mehrotra expects the company to remain “best positioned in a recovery scenario, although the overhang is negative for the near/mid-term outlook for shares.”

Latest Ratings for DSX

Oct 2020JefferiesMaintainsHold
Oct 2020StifelMaintainsHold
Sep 2020Pareto SecuritiesDowngradesBuyHold

View More Analyst Ratings for DSX
View the Latest Analyst Ratings


Related Articles (DSX)

View Comments and Join the Discussion!

Posted-In: Amit Mehrotra Deutsche BankAnalyst Color Short Ideas Downgrades Price Target Analyst Ratings Trading Ideas

Latest Ratings

TSLAJP MorganMaintains125.0
INTCTruist SecuritiesMaintains64.0
FBTruist SecuritiesMaintains320.0
AAPLCowen & Co.Maintains153.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at