Clarksons Securities has downgraded its outlook for Golden Ocean Group shares as it expects the New York-listed owner to have lower earnings in the not-so-distant future.
The investment banking division of shipbroker Clarksons lowered its price target on Golden Ocean shares to NOK 120 ($11.34) from NOK 130, but it still holds optimism for the second half of 2023.
“Golden Ocean is optimistic about market conditions improving in the latter half of this year and into 2024 as demand continues to recover and fleet growth slows,” analyst Frode Morkedal said in a note.
“Golden Ocean stands out as a compelling investment opportunity in the dry bulk sector.”
Capesizes would need to earn above $7,500 per day on average to achieve breakeven cash levels, Clarksons said.
They would need to make $18,000 per day on average to produce a “fair” enterprise value for New York- and Oslo-listed Golden Ocean that is seven times Ebitda and share price that is 10 times earnings per share (EPS_, Clarksons Securities said.
“The company can generate positive cash flows even at current spot rates and has considerable upside potential with modest increases in freight rates,” the bank said.
Golden Ocean posted $34.9m in net profit for the second quarter, down from $164m in net profit during the same period in 2022.
Second-quarter Ebitda came in at $90m for the three-month period, down from $208m in Ebitda for the year-ago time frame.
EPS for the second quarter was $0.17, down from $0.82 EPS in the same quarter last year.
