Insiderssay the initiation of coverage on US-quoted compatriots Costamare and DianaShipping by equity analyst Christopher Combe illustrates the investment bank’songoing interest in the space.
After losing veteranresearcher Jonathan Chappell andtwo of its transportation practice’s most prominentinvestment bankers in the midst of the market downturn, to some the futureseemed uncertain.
Since many of Combe’s peershave been forced to discontinue coverage of shipping stocks altogether, today observersfrom Wall Street say the expansion of the analyst’s research roster bodes wellfor both the bank and the industry as a whole.
Earlier in the day, Greekcontainership operator Costamare debuted with an “overweight” rating on a listthat now includes eight US-listed shipping stocks while Athens-based bulker specialistDiana Shipping was branded with JP Morgan’s equivalent of “hold”.
In the inaugural note onNasdaq-traded shares of Diana, Combe described the owner as a “quality bulker companylargely insulated from near-term market weakness” and a “long-term investmentin robust dry-bulk demand” with a young fleet and ample firepower to pursueexpansion.
“Diana offers defensive qualities that yielded relativeoutperformance during the prolonged (and ongoing) drybulk market downturn,” hesaid. “With management’s shift to somewhat shorter duration time charters,exposure to an eventual upturn is lifted.”
The analyst set a pricetarget of $9.50 per share, which implies upside potential of around 12% whencompared to the current average, and recommended that investors build positionson “material pullbacks”.
