Scorpio Bulkers To Sell Its SBI Phoebe Ultramax Vessel For $17.7M; Street Is Bullish

Scorpio Bulkers has inked a deal with an unaffiliated third party to sell its Ultramax bulk carrier, SBI Phoebe, for about $17.7 million. The shipping company expects to deliver the vessels in the first quarter of 2021. Shares closed 2.3% higher on Thursday.

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Scorpio Bulkers (SALT) has already sold eight vessels and has agreed to sell 17 more vessels. The transactions are expected to close in the first half of 2021. Further, the company said that it “intends to sell its 24 remaining wholly-owned or finance leased drybulk vessels (including 7 Kamsarmax vessels and 17 Ultramax vessels) during 2021.”

On Dec. 20, Scorpio Bulkers said that the company plans to fully exit the dry bulk sector in 2021 and switch its investments to next-generation wind turbine installation vessels.

Back in October, Scorpio Bulkers reported a loss of $1.45 per share in the third quarter, compared to analysts’ expectations for a loss of $1.21. Meanwhile, its revenues of $46.7 million beat the Street’s estimates of about $45 million. (See SALT stock analysis on TipRanks)

Following the 3Q results, B. Riley Securities analyst Liam Burke lowered the price target from $35 to $30 (71.6% upside potential), but reiterated a Buy rating on the stock. Burke noted that the gap between Scorpio Bulkers’ share price and net asset value is narrowing “through opportunistic asset sales.”

Shares have plunged 72.6% on a year-to-date basis, but the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 4 unanimous Buys. That’s with an average price target of $23, which implies upside potential of about 31.6% to current levels. .