2022 Could See Shipping Co. Dividends, Buybacks

Noble Capital Markets has an Outperform rating and a $45 per share price target on Euroseas Ltd. given the company’s favorable outlook for 2022.

The 2022 outlook for Euroseas Ltd. (ESEA:NASDAQ) is positive, and thus, the company could pursue dividends or buybacks this year, noted Noble Capital Markets analyst Poe Fratt.

Three current factors support the favorable outlook, Fratt wrote: a strong container market, expected high cash flow throughout 2022 and the depressed valuation of Euroseas’ stock.

As for the firm container market, Euroseas locked in a time charter equivalent (TCE) rate of $40,000 per day for two feeders, which compares to the $42,000 per day ($42K/day) TCE rate for the Oakland intermediate for four years. Also, two feeders and one intermediate will become available to Euroseas at various times in 2022.

“Numerous longer term charters at favorable rates create high forward 2022 cash flow visibility,” Fratt added.

In its model of Euroseas, Noble increased 2022 cover to 89% from 80% at a TCE rate of $26K per day, up from $25.3K/day.

Fratt pointed out that Euroseas’ current share price of around $25.66 indicates upside potential for investors.

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