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Time to Buy, Hold, or Take Profits in Euroseas (ESEA) Stock?
A few months ago, I highlighted Euroseas (ESEA - Free Report) as a top transportation stock to buy for higher highs in early June and even selected the company as my "Ultimate" pick for a stock that was poised to move higher throughout the quarter.
It’s very gracious to say that ESEA has delivered, now soaring nearly +70% in the last three months and recently hitting a new 52-week peak of $65 a share.
However, this certainly begs the question of whether it's still time to buy or hold stock in the well-established shipping container company or take profits.
Image Source: Zacks Investment Research
Euroseas’ Operational Excellence & High Charter Rates
Euroseas’ blazing stock performance has been attributed to its operational excellence, taking advantage of high charter rates, with the company earning $29,420 per day per vessel during Q2.
Having a solid niche in the feeder and intermediate containership segment, Euroseas operates on a smaller scale than shipping giants like Maersk, Kirby Corporation (KEX - Free Report) , or Matson (MATX - Free Report) , but has separated itself from many of its transportation shipping peers through its focus on fleet efficiency, timely investments, and cyclical market opportunities rather than dominating global trade routes.
As a more specialized agile shipping operator, it’s noteworthy that 90% of Euroseas’ fleet is under profitable long-term charters, with feeder and intermediate containerships being in high demand and short supply. Correlating with such, Euroseas impressively exceeded earnings expectations earlier in the month with Q2 EPS at $4.20 compared to estimates of $3.87.
Positive EPS Revisions
Following the impressive Q2 earnings beat, Euroseas’ fiscal 2025 EPS estimates have risen 7% over the last 30 days from projections of $15.47 per share to $16.61.
Image Source: Zacks Investment Research
In the last year, these revisions have skyrocketed more than 112% as also illustrated above, with Euroseas’ annual earnings now expected to increase roughly 12% in FY25 and projected to rise another 7% in FY26 to $17.74 per share, as shown below.
Image Source: Zacks Investment Research
Euroseas is highlighted as a Top Income Stock
Highlighted by Zacks Equity Research for its strong income characteristics, Euroseas has reinforced investor confidence by lifting its quarterly dividend by 7% from $0.65 per share to $0.70.
This also marks Euroseas’ second dividend increase within the last year, consistently increasing its payout since implementing a dividend in June of 2022. More impressive, Euroseas’ dividend yield is currently at 4.19% topping its Zacks Transportation-Shipping Industry average of 3.74% and towering over the S&P 500’s 1.15% average.
Image Source: Zacks Investment Research
Monitoring Euroseas’ Valuation
Despite a magnificent rally, Euroseas' stock still trades at just 3.7X forward earnings, which is intriguingly beneath its industry average of 7.4X and a steep discount to the S&P 500’s 24.6X. Plus, ESEA trades under the preferred level of less than 2X forward sales.
Image Source: Zacks Investment Research
Bottom Line
While it makes sense to take some profits in Euroseas stock if needed, ESEA sports a Zacks Rank #1 (Strong Buy) at the moment and could still have a nice amount of upside considering its cheap P/E valuation and the trend of positive EPS revisions for FY25. Euroseas’ shareholder-friendly approach has also made its stock desirable to keep in the portfolio in regard to sharing its profitability through a very generous dividend.
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Time to Buy, Hold, or Take Profits in Euroseas (ESEA) Stock?
A few months ago, I highlighted Euroseas (ESEA - Free Report) as a top transportation stock to buy for higher highs in early June and even selected the company as my "Ultimate" pick for a stock that was poised to move higher throughout the quarter.
It’s very gracious to say that ESEA has delivered, now soaring nearly +70% in the last three months and recently hitting a new 52-week peak of $65 a share.
However, this certainly begs the question of whether it's still time to buy or hold stock in the well-established shipping container company or take profits.
Image Source: Zacks Investment Research
Euroseas’ Operational Excellence & High Charter Rates
Euroseas’ blazing stock performance has been attributed to its operational excellence, taking advantage of high charter rates, with the company earning $29,420 per day per vessel during Q2.
Having a solid niche in the feeder and intermediate containership segment, Euroseas operates on a smaller scale than shipping giants like Maersk, Kirby Corporation (KEX - Free Report) , or Matson (MATX - Free Report) , but has separated itself from many of its transportation shipping peers through its focus on fleet efficiency, timely investments, and cyclical market opportunities rather than dominating global trade routes.
As a more specialized agile shipping operator, it’s noteworthy that 90% of Euroseas’ fleet is under profitable long-term charters, with feeder and intermediate containerships being in high demand and short supply. Correlating with such, Euroseas impressively exceeded earnings expectations earlier in the month with Q2 EPS at $4.20 compared to estimates of $3.87.
Positive EPS Revisions
Following the impressive Q2 earnings beat, Euroseas’ fiscal 2025 EPS estimates have risen 7% over the last 30 days from projections of $15.47 per share to $16.61.
Image Source: Zacks Investment Research
In the last year, these revisions have skyrocketed more than 112% as also illustrated above, with Euroseas’ annual earnings now expected to increase roughly 12% in FY25 and projected to rise another 7% in FY26 to $17.74 per share, as shown below.
Image Source: Zacks Investment Research
Euroseas is highlighted as a Top Income Stock
Highlighted by Zacks Equity Research for its strong income characteristics, Euroseas has reinforced investor confidence by lifting its quarterly dividend by 7% from $0.65 per share to $0.70.
This also marks Euroseas’ second dividend increase within the last year, consistently increasing its payout since implementing a dividend in June of 2022. More impressive, Euroseas’ dividend yield is currently at 4.19% topping its Zacks Transportation-Shipping Industry average of 3.74% and towering over the S&P 500’s 1.15% average.
Image Source: Zacks Investment Research
Monitoring Euroseas’ Valuation
Despite a magnificent rally, Euroseas' stock still trades at just 3.7X forward earnings, which is intriguingly beneath its industry average of 7.4X and a steep discount to the S&P 500’s 24.6X. Plus, ESEA trades under the preferred level of less than 2X forward sales.
Image Source: Zacks Investment Research
Bottom Line
While it makes sense to take some profits in Euroseas stock if needed, ESEA sports a Zacks Rank #1 (Strong Buy) at the moment and could still have a nice amount of upside considering its cheap P/E valuation and the trend of positive EPS revisions for FY25. Euroseas’ shareholder-friendly approach has also made its stock desirable to keep in the portfolio in regard to sharing its profitability through a very generous dividend.