Seaspan Corp's shares have been taken down a notch, having met its expected market value.
Jefferies analyst Randy Giveans lowered his rating from hold to buy while reducing 2019 forecasted earnings per share to $0.58 from $0.99 based on lower charter rates.
He said the company received $227m from K-Line for early termination of charters on seven boxships but rechartered them at a lower rate for shorter duration.
"Although this is certainly a cash-flow positive modification, we are reducing our 2019 and 2020 EPS estimates to reflect the company's reduced charter guidance," he wrote in a note to clients.
He said Seaspan also lowered its debt-to-capital ratio down from above 60% to below 50% over the past year, causing the share price to reach a two-year high of $10.70
"As such, we are downgrading our rating from buy to hold as the share price is now in line with our price target," he wrote.
"That said, we believe there is potential upside should SSW pursue accretive acquisition opportunities by purchasing assets or completing attractive M%A deals."
