- Danaos Corp. is a top pick in container shipping, offering over 50% upside to a conservative value estimate amidst surging free cash flow backed by long-term charters.
- Containership lessors enjoyed a strong run in the 1H-21, but concerns about a macro growth slowdown and lack of appreciation for improving fundamentals have led to flat trading in 2H-21.
- DAC is flat since June despite generating over $250M in EBITDA the past 2 quarters, adding nearly $1B in revenue backlog, and gaining over $150M from ZIM monetization.
- Danaos Corp. now trades at the cheapest EV/EBITDA in company history even as charters continue to improve. I expect nearly $700M in EBITDA for 2022 with similar levels for 2023.
- Our 'fair value estimate' is $110/sh, offering 57% of upside. I also expect a substantial dividend raise by early-2022.
For further details see:
Danaos Corp.: Cash Flow Machine, Primed For 50%+ Breakout