Market Overview

Stifel: SEACOR Has Been Hot Lately, But Buying At This Price Could Burn You

Stifel: SEACOR Has Been Hot Lately, But Buying At This Price Could Burn You

While Seacor Holdings, Inc. (NYSE: CKH) has been benefiting from a host of factors, the company's near-term potential is priced in, according to Stifel.

The firm downgraded Seacor Holdings from Buy to Hold and raised its price target from $40 to $53. 

SEACOR is experiencing a hurricane-induced increase in Caribbean and Puerto Rican trade, as well as in its disaster recovery and barge businesses, analyst Benjamin Nolan said in a Sunday note.

The Fort Lauderdale-based company's growth areas could include U.S. government business, rail ferries and consolidation opportunities, Nolan said. (See Nolan's track record here.) 

All of these options represent the possibility of future earnings growth for SEACOR, the analyst said. 

The Hurricane Impact 

SEACOR's third-quarter earnings, reported Nov. 1 after the close, slightly missed estimates, according to Stifel. The company lost $8.1 million on a mark-to-market their ownership of Dorain LPG, which had a $0.46 per share effect, Nolan said. 

That said, the shipping business beat Stifel estimates by $4.8 million.

Stifel adjusted its estimates for the company due to a trio of factors. The barge business is improving in both rates and volume, most notably in St. Louis, Nolan said. The firm also expects SEACOR to start receiving windfall profits from Witt O'Brien's, a SEACOR-owned emergency management and disaster company, as communities clean up after a major hurricane season. 

Caribbean and Puerto Rico container trade are likely to remain stronger due to the rebuilding occurring after serious destruction on a number of islands. To reflect the business' earnings potential, Stifel upwardly adjusted its estimates and also its price target for the shares.

Despite the healthy business climate, SEACOR's valuation is starting to be stretched, Nolan said.

The spinning off of the offshore business has done its job, as the market has re-rated the company's shares quickly on its own earnings potential, Nolan said. 

"At 60.9 times 2018 earnings and 33.6 times 2019 earnings and 126 percent of book value, we see much of that healthy business is already built into the price of the shares." 

SEACOR could judiciously use the higher stock price to make further bolt-on acquisitions, Nolan said. Given the stock run, the analyst is of the view that the valuation doesn't provide a margin of safety. Before going long on the shares, Nolan said he'd like to see continued better operations or a change in valuation.

Related Links:

Imperial Initiates Coverage Of Oil & Oilfield Services Companies

Elon Musk Offers To Rebuild Puerto Rico's Energy Infrastructure

Latest Ratings for CKH

Nov 2017DowngradesBuyHold
Nov 2017MaintainsNeutral
Aug 2016Initiates Coverage onHold

View More Analyst Ratings for CKH
View the Latest Analyst Ratings

Posted-In: Benjamin Nolan Frank Galanti Seacor StifelAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (CKH)

View Comments and Join the Discussion!

Latest Ratings

ABBBarclaysInitiates Coverage On
DPLOWilliam BlairUpgrades
SUPVItau BBADowngrades
GGALItau BBADowngrades
BMAItau BBADowngrades
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.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
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

5 Biggest Price Target Changes For Monday

Helios & Matheson Ups Its Stake In MoviePass Again