Strong 2Q2021 operating results masked by FFA losses. After backing out FFA hedges and other items of $31.6 million, adjusted EBITDA of $62.8 million was well ahead of expectations. TCE revenue of $93 million and TCE rates of $21.6k/day were above expectations, while opex were in line. It was the fourth quarter in a row of improving operating results, after a very tough 1H2020, and the strongest quarter in more than a decade. Impressive 3Q2021 forward cover positively impacts 2021 EBITDA and TCE rate estimates. Moving 2021 EBITDA to $258 million (from $255 million) based on TCE rates of $22.3k/day to reflect higher 2Q2021 results and high forward cover with ~75% of 3Q2021 available days are booked at TCE rates of $28.3k/day versus 71% of 2Q2021 available days booked at $20.1k/day. FYI, the forward cover includes hedging losses.2022 EBITDA also moves higher to $275 million (from $267 million) based on TCE rates of $22.0k/day. Our EBITDA estimate is based on TCE rates of $22.0k/day, ownership days of 19,345 (+1,125) and cash operating costs of $7.1k/day.Asset sales and equity offering partially fund acquisitions and temper financial leverage. Refinancing of high cost Eagle Bulk Shipco 8.25% bonds due in November 2022 seems likely by year-end 2021.Maintain Outperform rating and price target of $65/share. EGLE's track record on the fleet renewal program is solid. After closing pending transactions, the fleet will expand to the highest level ever and is well positioned to benefit from continued strong dry bulk market fundamentals. Operating leverage has expanded, the fleet profile has improved and scrubbers should add value if/when fuel spreads recover. The hedging program and lack of clarity on a dividend and/or buy back given the improving financial position might have disappointed some investors, but we believe that the hedging program is prudent and the chances are improving that a dividend and/or buy back are announced by year-end 2021. While the YTD gain of 119% fully erased last year’s loss of 41% and partially discounts the strong dry bulk market fundamentals, we view the recent pullback of 26% from the 2021 high of $56.47/share in June, including the 4% loss following the 2Q2021 call, as unwarranted. We believe that the outlook remains bright and the risk/reward profile remains attractive. Read More >>