Tuesday, Jefferies upgraded shares of Safe Bulkers (NYSE:SB) from Hold to Buy, with a new price target set at $6.00, up from the previous $4.00. The firm highlighted Safe Bulkers as an "under-the-radar" player in the dry bulk sector, noting the company's long-standing track record and considerable fleet size.
The upgrade comes as Safe Bulkers is perceived to be trading at a significant discount compared to its United States-listed dry bulk counterparts.
The valuation is also expected to benefit from the company's recent announcement of an additional buyback program, which authorizes the repurchase of up to 5 million shares. This is in addition to an existing buyback plan of the same volume.
Jefferies points out that the completion of Safe Bulkers' newbuilds will mark the end of an extensive fleet renewal initiative. The firm believes this will strategically position Safe Bulkers to meet forthcoming emission regulations, potentially enhancing the company's industry standing and financial performance.
The analyst from Jefferies remarked on the company's proactive measures to strengthen its valuation through share buybacks and fleet updates. These efforts are seen as key drivers for the upgraded rating and higher price target.
Investors and market watchers will be paying close attention to Safe Bulkers' share performance following this upgrade, as the company continues to execute its share repurchase program and moves towards completing its fleet renewal in anticipation of new emission standards.
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