Univest Securities added to its earnings forecast for Euroseas, as the shipowner looks to benefit from continued strength in the container ship market.
James Jang, the New York-based investment bank’s director of research, hiked his expectations of the Greek shipowner’s operating earnings per share (EPS) to $22.72 in 2023, up from his prior bet of $21.37.
His bullishness grew more for 2024, rising to an estimate of $22.22 in EPS from an earlier forecast of $17.85.
“We believe the bull run for containership fundamentals should persist through 2024,” Jang said.
That same year, full-year revenue would rise to $297m, from a prior estimate of $263m, while Univest’s 2024 Ebtida estimate grew roughly $30m to $196m.
Jang pointed to factors that could propel the Greek shipowner to higher earnings despite the overhang of a growing boxship orderbook.
“We anticipate an increase in scrapping of older tonnage due to environmental regulations coupled with the continued dislocation of trade routes,” he said.
His estimated that the hike comes roughly two weeks after New York-listed Euroseas reported record profits for the second quarter.
Euroseas reported a $30.7m profit for the second quarter, nearly quadrupling $7.9m in earnings made in the same period last year and beating analyst expectations.
Univest has a “buy” rating on Euroseas’ stock and a $50 price target, which implies the shares are expected to more than double in value from current levels.
But the bank’s bullishness comes after Euroseas chief executive Aristides Pittas warned of a threat of falling time-charter rates.
“We expect the remainder of 2022 to remain strong, but in 2023, increased deliveries, easing of port congestion and demand destruction should take their toll and charter rates should decline significantly,” he told analysts in an earnings call.
“Of course, everything will depend on how the market develops, so we’re not taking any decision now about what we’re going to do in 2024.”
The Athens-based company owns a fleet of 18 feeder and intermediate container ships, plus a nine-ship newbuilding programme.
