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Eagle Bulk Shipping (NYSE:EGLE) and Euronav (NYSE:EURN) were downgraded Wednesday to Hold from Buy with respective $55 and $18 price targets at Jefferies.
Eagle Bulk (EGLE) shares appear to have fully priced in the all-stock merger offer from Star Bulk Carriers (SBLK), according to Jefferies analysts led by Omar Nokta, who also said he remains optimistic on the dry bulk outlook and sees Eagle shareholders benefiting from Star Bulk's larger operating platform.
New management at Euronav (EURN) aims to diversify the company into other segments beyond tankers, which Nokta sees as positive for the long-term story, but substantial capital expenditures and increased debt load likely will limit share performance in the near term.
Overall, Jefferies anticipates record Q4 results from LPG players, sequentially stronger results for tankers and dry bulk, steady earnings for LNG and weak results coupled with improved guidance.
Jefferies' top plays by subsegment: Maersk (OTCPK:AMKBF) (OTCPK:AMKBY) and Zim (ZIM) in container shipping; Scorpio Tankers (STNG) and Teekay Tankers (TNK) among tankers; Golden Ocean (GOGL), Genco Shipping (GNK) and Star Bulk in dry bulk; and Dorian LPG (LPG) among VLGCs.