Zacks Investment Research upgraded shares of Excel Maritime Carriers Limited (EXM) from UNDERPERFORM to NEUTRAL on May 24, 2012, with a target price of $1.00.
We upgrade our recommendation on Excel Maritime to Neutral based on its current valuation, which plummeted 71.4% in the last year. This was primarily attributable to the gloomy prospects of the drybulk shipping industry. This sector is facing serious challenges since the spot vessel rates collapsed significantly. We believe the sole reason for this dismal condition is the sheer increase of newbuild ships under operation that resulted in intense price competition. The spot rates of drybulk vessels have fallen to such a low level that even surging commodity prices in the Asian markets failed to offset the loss of the vessel owners. However, this low level of valuation may provide a cushion for further downslide of the stock price. Excel Maritime reported mixed financial results for the first quarter of 2012. Although net income was far below the Zacks Consensus Estimate, voyage revenue beats it handsomely.
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