Natasha Boyden of Global Hunter Securities, which initiated research coverage of the US-quoted bulker owner back in May with a “reduce” rating, branded the stock with a “neutral” but left a negative second-quarter earnings per share (EPS) estimate of ($0.38) intact.
In a note to clients the analyst said a recent decline in the Greek company’s share price, which has slipped 78% over the past few months, contributed to the adjustment but believes the stock could suffer even further as top management looks to raise $30m in new equity.
“We note that Excel filed a prospectus to issue $35m of equity from time to time,” she said. “While this amendment provides the company with breathing room in regard to its principal payments, we believe this ultimately ‘kicks the can down the road’ and we expect more liquidity challenges could develop in late 2013 and 2014.”
Boyden shaved her 2012 and 2013 EPS and earnings before interest, taxes, depreciation and amortization (Ebitda) estimates to ($1.53), ($1.23), $64m and $54m, respectively, after Global Hunter updated its freight rate forecast.
The US investment bank lowered its second-quarter 2012 capesize and panamax day rate projection to $4,400 from $8,000 and $7,600 from $11,500, respectively, while its handymax prediction increased by $800 to $10,800.
“In the current market environment we believe companies that have long-term charter coverage with credit-worthy and diverse counterparties, low leverage, modern fleets and experienced management teams should outperform the sector over the long term,” Global added in its latest earnings preview.
The firm tied “buy” ratings to US-listed bulker owners Baltic Trading, Norden, DryShips, Diana Shipping, Navios Maritime Holdings and Safe Bulkers while Navios Maritime Partners and Star Bulk Carriers were dubbed “accumulate”
Excel Maritime and Paragon Shipping were the only bulker stocks rated “neutral” while Eagle Bulk Shipping and Genco Shipping & Trading were branded “reduce” with shares of the latter falling 8.24% to $2.51 in midday trading.
