Canaccord Genuity starts Braemar off at 'buy'

Analysts at Canaccord Genuity initiated coverage on shipbroking services firm Braemar with a 'buy' rating and 410.0p target price on Wednesday, stating it was "all aboard for the super cycle".

Canaccord Genuity noted that Braemar operates across multiple segments and geographies, offering broking services across a selective but diversified range of segments, including tankers, specialised tankers/products, dry cargo and offshore. It also offers sale and purchase advisory, corporate finance services and securities services.

The Canadian bank stated that with a refreshed and focused management team since 2023, it thinks the shares offer "a rare opportunity" to invest in a company where the fruits of a turnaround are only just starting.

"This reflects a company now refocused on areas of potential competitive advantage where we think Braemar is on the cusp of both compounding upside and outperforming," said Canaccord Genuity. "We see potential in the shares amplified by reduced debt leverage of equity – allowing scope for targeted additional growth (either through new hires or acquisitions). We see long-term EPS progress likely to be accompanied by PER expansion (recovery)."

Canaccord also believes the outperformance was also set to be potentially compounded as the maritime cycle was on the upward part of a potential "super cycle" - due to a shortage of new ship-building capacity and increasingly stringent environmental requirements in key markets.

Reporting by Iain Gilbert at Sharecast.com