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ESEA: Long-Term Charters Will Drive Cash Flow And Earnings Visibility

Rising Vessel Deliveries Will Deflate Overestimated Charter Rates

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ESEA
AnalystConsensusTarget
Not Invested
Published 24 Sep 2024

Update shared on 11 Dec 2025

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63.8%
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Narrative Update on Euroseas

Analysts have maintained their price target for Euroseas at approximately 74.67 dollars, citing essentially unchanged long term assumptions for the discount rate, revenue growth, profit margins, and forward valuation multiples.

What's in the News

  • Secured new multi year charter contracts for three modern 2,800 teu vessels, M/V Leonidas Z, M/V Gregos, and M/V Terataki, at a gross daily rate of 30,000 dollars for 35 to 37 months, expected to start after current charters roll off in 2026 (Key Developments).
  • The three new feeder vessel charters are expected to generate about 75 million dollars of EBITDA over the minimum contracted period and significantly enhance revenue and earnings visibility through 2029 (Key Developments).
  • New charters lift Euroseas charter coverage for 2026 and 2027 to approximately 82.5 percent and 42 percent respectively, supporting long term planning and growth initiatives (Key Developments).
  • Extended the time charter for the 2006 built 1,740 teu feeder containership M/V Jonathan P for 11 to 12 months from November 17, 2025, at a gross daily rate of 25,000 dollars, a 5,000 dollar per day increase over the current rate (Key Developments).
  • The M/V Jonathan P charter is expected to add about 5.65 million dollars of EBITDA over the minimum period and raises fleet charter coverage to 100 percent for the rest of 2025 and about 70 percent for 2026 (Key Developments).

Valuation Changes

  • Fair Value: Unchanged at approximately 74.67 dollars per share, indicating no revision to the intrinsic value estimate.
  • Discount Rate: Fell slightly from about 10.97 percent to about 10.96 percent, implying a marginally lower required return.
  • Revenue Growth: Effectively unchanged at about 1.29 percent, suggesting a stable outlook for top line expansion.
  • Net Profit Margin: Remains essentially flat at roughly 51.24 percent, reflecting consistent expectations for profitability.
  • Future P/E: Edged down slightly from about 6.0x to about 5.99x, indicating a marginally lower forward valuation multiple.

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