Jefferies on Maritime Group: 1Q11 Dry Bulk Earnings Preview & Outlook Update; Going From Bad To Worse

Jefferies on Maritime Group: 1Q11 Dry Bulk Earnings Preview & Outlook Update; Going From Bad To Worse

Jefferies analyst said, "We continue to believe the dry bulk shipping market is likely to remain very challenging through at least 2012 given the current weak charter rate environment and likelihood that charter rates will remain weak based on the cumulative impact of recent newbuilding deliveries and significant expected future newbuilding deliveries over the next 18-24 months."

"Reducing 1Q11 charter rate and EPS estimates. We are reducing our 1Q11 dry bulk shipping charter rate and correspondingly EPS estimates primarily due to the slower than expected return of Australian exports and slightly quicker than anticipated dry bulk shipping fleet growth during the quarter...Reducing 2011 and 2012 charter rate and EPS estimates. We are reducing both our 2011 and 2012 charter rate and correspondingly EPS estimates to reflect the anticipated cumulative negative impact on charter rates of the slightly quicker than anticipated fleet growth in recent months."

Jefferies lowers price target on DryShips (Nasdaq: DRYS) from $6 to $5, Diana Shipping (NYSE: DSX) from $20 to $14, Eagle Bulk Shipping (Nasdaq: EGLE) from $7 to $4, Globus Maritime (Nasdaq: GLBS) from $12 to $11, Genco Shipping & Trading (NYSE: GNK) from $19 to $13, and Safe Bulkers (NYSE: SB) from $12 to $8.

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