UPDATE: Stifel Initiates Coverage on Star Bulk Carriers on Expected Challenges Ahead

In a report published Tuesday, Stifel analyst Benjamin Nolan initiated coverage on Star Bulk Carriers (NASDAQ: SBLK) with a Hold rating.

In the report, Stifel noted, “We are initiating coverage of Star Bulk Carriers (SBLK) with a Hold rating on the shares, as we believe the dry bulk shipping market is likely to face at least an additional six months of oversupply, resulting in persistently low rates, before demand exceeds supply, resulting in sustainable improvements in charter rates. SBLK shares are already trading around our $8.59 NAV estimate and at a 2014E EV/EBITDA multiple of 8.8x, which is slightly higher than the historical multiples for the peer group. As a result, we believe the shares are currently fully valued but we expect to be more constructive on valuation as the market draws near to what we believe is likely to be a cyclical improvement in dry bulk shipping supply and demand balance in mid-2014.”

Star Bulk Carriers closed on Monday at $8.41.