UPDATE: Stifel Nicolaus Initiates Seaspan at Sell Rating on Muted Outlook

In a report published Thursday, Stifel Nicolaus analyst Benjamin Nolan initiated coverage on Seaspan(NYSE: SSW) with a Sell rating.

In the report, Stifel Nicolaus noted, “We are initiating coverage of Seaspan Corp (SSW) with a Sell rating on the shares and a $16 fair value estimate. While Seaspan does have a strong backlog of secured revenues that should provide ample cash flows for maintaining and perhaps even growing dividends, with shares trading at a current yield of 5.7% we believe the shares are overpriced. In fact, the shipping MLP peer group is currently trading at an average yield of 7.2%, while other yield-oriented maritime lessors are trading at yields of 7.9%. Furthermore, given the currently oversupplied state of the container shipping market, and our expectation that the company will generate new projects, we believe those projects are likely to result in only modest growth in cash flow available for distribution.”

Seaspan closed on Wednesday at $21.85.