UBS Reiterates a Sell Rating on Diana Shipping

According to The Fly, in a report issued on July 28, Spiro M. Dounis from UBS reiterated a Sell rating on Diana Shipping (NYSE: DSX), with a price target of $1.25. The company’s shares closed yesterday at $2.60, close to its 52-week low of $1.95.

M. Dounis commented, “Q: How did the results compare vs. expectations? A: DSX reported implied EBITDA of $(4.0)mm, just ahead of the UBSe of $(4.5)mm and the Street mean of $(5.1)mm. Better than expected vessel utilization and opex drove the beat, partially offset by weaker than expected TCE rates. Q: What were the most noteworthy areas in the results? A: On the earnings call management discussed the possibility of purchasing $40- $50mm worth of vessels without debt financing if bank negotiations break down. Q: Has the company’s outlook/guidance changed? A: The strategy has changed: The goal of buying unencumbered vessels would be to gain negotiating power (i.e. let’s make a deal because we don’t have cash) while retaining the ability to sell the vessel if cash is needed to maintain operations. Q: How would we expect investors to react? A: The decision to buy vessels looks somewhat aggressive and we believe might be a risk some are unwilling to take.”

According to TipRanks.com, Dounis is a 1-star analyst with an average return of -6.4% and a 46.2% success rate. Dounis covers the Services sector, focusing on stocks such as Navios Maritime Acquisition, KNOT Offshore Partners, and Teekay LNG Partners.

Diana Shipping has an analyst consensus of Moderate Sell

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Based on Diana Shipping`s latest earnings report from March 31, the company posted quarterly revenue of $30.79M and quarterly net profit of -$31.39M. In comparison, last year the company earned revenue of $38.57M and had a net profit of -$14.06M.

Diana Shipping, Inc. operates as a holding company, which provides shipping transportation services through the ownership and operation of dry bulk vessels. The company’s vessels are employed primarily on medium to long-term time charters and transport a range of dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes. Diana Shipping was founded on March 8, 1999 and is headquartered in Athens, Greece.