Pyxis Tankers Inc. (PXS)

PXS Details

Pyxis Tankers Inc. (PXS.O) was incorporated in 2015 and is based in Maroussi, Greece. The company operates as a maritime transportation company focusing on the tanker sector in the United States. The critical products transported are naphtha, gasoline, jet fuel, diesel, and other liquid bulk items.

Financial Highlights for 31^st March 2021- The key focus for the 1Q FY21 are -

• Declining Revenues - The Time Charter equivalent revenues declined to $4.3 million for 1Q FY 21 compared to the 1Q FY 20 for $4.95 million, primarily because of the poor chartering Environment in 1Q FY 21.
• Increase in Losses - The company reported an increase in losses to $2.0 million in 1Q FY21 compared to the loss of $1.2 million in 1Q FY20.
• Debt – PXS’ total funded debt/ total capitalization stood at 50%, where-in the cash balance stood at $19.06 million as at the end of 1QFY21.

Financial Performance (Source: Company Report)

Key Risks:

The company is involved in the transportation of petroleum products that are highly flammable and risky to transport. Another risk is the decline in the transportation and freight activities because of CVOD-19 restrictions, which will negatively impact the company's revenues.

Outlook:

The U.S. refinery utilization is currently 87%, which is the highest since March 2020, giving an optimistic outlook in the near term. Further, an uneven economic recovery could be helpful to play on the arbitrage opportunity, which can further add to the bottom-line margins in the company's book. In addition, the IEA announced the shutdowns of 1.7M b/d of refinery capacity located in OECD, which will help create demand for more imports, thereby utilizing the company's services, positively impacting its revenues.

Stock Recommendation:

The stock of PXS gave a return of -13.275% in the last three months and a return of -29.52% in the last six months. The stock is trading below the average 52-week low price of $0.7358 and the 52-week high price of $4.60, giving an extreme downtrend on the charts. Considering the recent declining revenues, increasing losses, declining demand because of COVID-19, the current trading levels, high volatility, we recommend a “Sell” on the stock at the closing price of $0.7329, down by -7.22%, as of 15th July 2021.

Technical Overview:

PXS' prices recently broke a major support level of USD 0.760 on the downside, indicating the possibility of a downward direction for the stock. On the daily chart, the momentum indicator RSI (14-period) is trading in a negative territory at ~32.94 levels and the CMP is also sustaining below the 50-period SMA, further supporting a downside stance. Now an immediate support level for the stock appears at USD 0.620 while resistance is at USD 0.870.

PXS Daily Technical Chart, Data Source: REFINITIV Note: The purple color line represents RSI (14-period). The green color line indicates 50-period SMA.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

• Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

• Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.