US owner Eagle Bulk Shipping has seen its share price plummet 46% in a month, but analysts see little risk to its equity. Fearnley Securities called the stock plunge a “massive sell-off”. The shares had been trading at $78 in June, but closed in New York on Wednesday at $42, down 7% in a day. Current pricing implies a market cap of $691m versus a scrap net asset value (NAV) for the fleet of $114m, based on a conservative recycling price of $450 per ldt, the investment bank calculates. This leaves a residual value of only $577m to be covered by cash flows over the coming years, analysts Oystein Vaagen, Erik Gabriel Hovi and Ulrik Mannhart said.

A total of $275m of debt is already accounted for in the scrap NAV assessment, so Fearnleys is using a cash breakeven figure of $10,000 per day. This implies Eagle’s 53 vessels only need to manage earnings of $13,000 per day on average for the next 10 years to cover the current residual value. The investment bank has a “hold” rating on the stock.

The company is a panamax and supramax specialist. Panamaxes were quoted at $21,260 per day on Thursday, down 3% on the day. Supramaxes were stable at $24,700 per day. In June, Eagle Bulk reached an agreement to sell its oldest bulker and the only one that remained in its fleet from the time of its 2005 initial public offering, shipbrokers said. Eagle offloaded the 55,400-dwt Cardinal (built 2004) “in the high-$15s” to unidentified Chinese buyers, brokers said, referring to millions of dollars.

The price is further confirmation of strong valuations in the secondhand market, although it looked to be slightly below the $16.35m estimate of valuation platform VesselsValue.