SB - Pangaea Logistics Solutions: Downgrading On Valuation And Mediocre Q2 Outlook - Hold

2024-06-01 08:31:29 ET

Summary

• Pangaea Logistics Solutions reports mixed Q1 results with profitability ahead of expectations but revenues falling short due to lower charter-in days.
• Operating cash flow of $9.0 million was impacted by higher working capital requirements. Pangaea finished the quarter with cash and cash equivalents of $95.9 million and $260.8 million in debt.
• Subsequent to quarter-end, the company agreed to acquire a pair of 2016-built Supramax carriers for an aggregate purchase price of $56.6 million.
• The company continues to struggle with the profitability of its chartered-in fleet which has resulted in a rather disappointing preliminary Q2 average daily time charter equivalent ("TCE") rate of $16,300.
• Given the combination of recent stock price appreciation and mediocre near-term outlook, I am downgrading Pangaea Logistics Solutions' shares from "Buy" to "Hold".

Note:

I have covered Pangaea Logistics Solutions, Ltd. (NASDAQ: PANL ) previously, so investors should view this as an update to my earlier articles on the company. ...

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