Euroseas Analyst Cuts Price Target, Still Sees Almost 100% Upside Courtesy Multi-Year Contracts

  • Maxim Group analyst Tate Sullivan maintained Euroseas Ltd ESEA with a Buy and lowered the price target from $42 to $36.
  • ESEA announced the sale of the 2001-built containership Akinada Bridge for $14.2 million
  • The vessel ended its previous contract at the end of 3Q22 and was undergoing drydock repairs. 
  • ESEA bought the Akinada Bridge vessel in 2017 for $11 million.
  • Based on depreciation since that purchase and potential asset impairments on other vessels amid lower containership rates, Sullivan forecasted a net gain of $3 million from the sale in 1Q23. 
  • The analyst believed ESEA sold the ship to a buyer that would scrap the ship, which Sullivan expected allowed ESEA to sell the ship without incurring high drydocking costs in 4Q22. 
  • Consequently, Sullivan increased the 4Q22 EPS estimate to $2.75 (down 12.1% Y/Y) from $2.27. 
  • Sullivan reduced 2023 and 2024 revenue and EPS estimates.
  • The analyst raised the 3Q23 BV/share forecast but reduced 4Q23. 
  • Sullivan reduced the price target multiple amid higher interest rates and expectations for slower global economic growth. 
  • The analyst maintained a Buy rating as expected ESEA's existing contract coverage would help the company maintain a leverage ratio below 2x while adding nine new containerships, repurchasing shares, and maintaining the quarterly dividend.
  • Price Action: ESEA shares traded lower by 0.8% at $18.55 on the last check Friday.
Price Target
Posted In: Analyst ColorNewsPrice TargetReiterationAnalyst RatingsBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!