Citi Research Analysts Expecting Seasonal Lull For Tankers Like Navios Maritime

Citi Research lowered its estimates and price target for Navios Maritime Acquisition Corporation (NYSE: NNA).

In its Friday report, the company lowered its 2Q16E EPS by $0.04 to $0.10 on a 16 percent cut to its average TCE rate expectations and a higher G&A expense assumption. The EPS estimates for 2016 and 2017 currently stand at $0.44 and $0.29, respectively. The analysts reiterated a Buy rating, lowering the price target to $2.5 from $3.

The analysts updated their product tanker expectations, stating the product tanker earnings are tracking below their expectations on a combination of moderating trade growth, continued fleet expansion and some typical seasonality.

Related Link: Euronav Remains Citi's Top Pick Among Tankers

"Overall trade growth slowed in 2Q, due to some expected moderation after 2015's robust growth and more typical seasonality related to summer refinery slowdowns. On the supply side, steady vessel deliveries have led to a 6 percent annualized fleet expansion run rate versus expected 3.5 percent demand growth for full year 2016, with the current order book at 14 percent of the world fleet, down from 18 percent in January," wrote Citi.

At time of writing, Navios Maritime was up 1.32 percent on the day, trading at $1.54.

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