Wells Fargo Downgrades Genco Shipping (GNK) to Underperform; EBITDA Declining Significantly As Charter Coverage Falls Off

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Wells Fargo downgraded Genco Shipping (NYSE: GNK) from Market Perform to Underperform. Valuation range lowered to $3-$5 from $6-$8.

Wells analyst says, "...we have lowered our 2011 and 2012 GNK EPS estimates to $0.13 (from $0.90) and -$1.76 (from $0.06), primarily due to reduced day rate estimates throughout the different dry bulk asset classes. Our 2011 and 2012 EBITDA estimates decline by $31 million (12%) and $73 million (30%) to $230 million and $166 million, respectively. Risks include exposure to volatile day rates and asset values, significant financial leverage, increasing capacity, and marine disasters."

For more ratings news on Genco Shipping click here and for the rating history of Genco Shipping click here.

Shares of Genco Shipping closed at $6.74 yesterday, with a 52 week range of $6.28-$18.08.

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