In a report released yesterday, Tate Sullivan from Maxim Group maintained a Buy rating on Top Ships (TOPS – Research Report), with a price target of $42.00.
Tate Sullivan’s Buy rating for Top Ships is based on a variety of strategic financial moves the company has made, which are expected to significantly improve its financial standing. The redemption of preferred equity with a high annual dividend rate of 13.5% is a key factor, as it is anticipated to yield considerable cash flow savings for the company. Furthermore, Sullivan has increased both the free cash flow and EPS estimates, suggesting that Top Ships will leverage the improved cash flow to further reduce debt, which bodes well for the company’s financial health and stock valuation.
The valuation of Top Ships’ stock also plays a substantial role in Sullivan’s Buy recommendation. At the time of the report, the stock was trading at just 0.4 times the projected second half of 2023 book value per share, which Sullivan deems undervalued. Despite a recalibration of the book value per share estimates, the maintained price target of $42 represents an appealing 1.3 times the revised book value per share estimate for the second half of 2024. This implies a significant upside potential from the current trading level, thus supporting the Buy rating. Sullivan’s analysis indicates a firm belief in the company’s potential for growth and profitability, justifying the positive outlook on the stock.
Sullivan covers the Industrials sector, focusing on stocks such as Performance Shipping, Tetra Tech, and Top Ships. According to TipRanks, Sullivan has an average return of 16.5% and a 46.40% success rate on recommended stocks.
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Top Ships (TOPS) Company Description:
Top Ships, Inc. is an international owner and operator of tanker vessels. It focuses on the transportation of crude oil, petroleum products and bulk liquid chemicals. The company was founded by Evangelos J. Pistiolis on January 10, 2000 and is headquartered in Maroussi, Greece.
Read More on TOPS:
- TOP Ships Inc. Announces Vessel Refinancings and Full Redemption of Series F Perpetual Preferred Shares Held by Related Party
- TOP Ships announces vessel refinancings, redemption of preferred shares
- Red Sea attacks force rerouting of shipping vessels, Reuters reports
- TOP Ships announces share repurchase program
- TOP Ships Announces Share Repurchase Program
