UBS Reiterates Sell as Diana Shipping's (DSX) Assets Continue to Decline - PT to $2.25
UBS maintained a Sell rating on Diana Shipping (NYSE: DSX), and cut the price target to $2.25 (from $3.25). Market values of DSX's assets continue to decline as a result of the worst bulker market in 30+ years. In UBS' view, management has done a commendable job of positioning the company to not only withstand the challenging dry bulk market, but to also continue to grow its fleet.
Analyst Spiro Dounis commented, "We do not foresee a cash burn issue given DSX's chartering strategy and strong balance sheet. That said, the market values of its assets continue to decline as a result of the worst bulker market in 30+ years. In our view, DSX's management has done a commendable job of positioning the company to not only withstand the challenging dry bulk market, but to also continue to grow its fleet. We believe the acquisition of second-hand vessels at the low point in the cycle will benefit the company in the long run; however, DSX has already caught a few “falling knives” and the ongoing decline in its fleet value cannot be ignored in the valuation of the company."
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Shares of Diana Shipping closed at $2.59 yesterday.