Danaos: +60% Discount To Book With A Reasonable Yield, Reiterate Buy

2025-04-11 08:34:23 ET

Summary

• Danaos Corporation broke a six-quarter streak of missing EPS estimates, ending Q4 2024 with a 41 bps beat and a yield above 4.7%.
• Despite volatile trading and tariff uncertainties, DAC's fundamentals remain strong with significant revenue growth, fleet expansion, and a $3.4 billion charter backlog.
• DAC's financial strength, including $671 million in current assets against $169 million in short-term liabilities, makes it a safe-haven investment amidst potential trade disruptions.
• With aggressive buybacks, a compelling risk-reward ratio, and undervaluation, DAC is rated a Buy, potentially a Strong Buy, if valuation imbalances worsen.

Although Danaos Corporation ( DAC ) broke a six-quarter streak of missing EPS estimates, the Greek shipping company came in strong with a 41 bps beat in the final fiscal quarter of 2024. In my last article on DAC back in August 2024, right after Q2 results were announced, I noted that the stock price was far removed from the reality of strong fundamentals. Those fundamentals have held on, but the price seems to have further deteriorated between my last coverage and now....

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