Shares of Global Ship Lease (GSL 0.72%) were up more than 10% on Friday morning following positive commentary from a Wall Street analyst. We're in a period of strong pricing power for maritime transports, and Global Ship is set up well to benefit.
Global Ship Lease is an owner of a fleet of small to mid-sized containerships. The company has been focused on expansion, last month raising fresh capital via a secondary offering and earlier this week putting that money to work with a $116 million deal to acquire seven ships. With the additions, Global Ship Lease has a fleet of 50 vessels with total capacity of more than 287,000 Twenty-foot Equivalent Unit (TEU) containers.
The deal has Jefferies excited. Analyst Randy Giveans on Friday initiated coverage on the stock with a buy rating an an $18 price target. Giveans notes that new charters are coming in at rates three times higher than expiring charters, and for longer durations.
The pandemic disrupted normal supply chains in 2020, and left ships and containers out of position for a rebound. As a result, shipping customers are having a hard time quickly getting crates and containers from point A to point B, which is creating pricing power for transportation companies with available capacity.
Even after Friday's gain, Global Ship trades below where it did prior to announcing a secondary offering, and well-below Giveans' price target. Things appear set up well for this stock to continue higher in the months to come.