Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💎 Access the Market Tools Trusted by Thousands of Investors Get Started
Jefferies raises tanker estimates on strengthened earnings power
Published Nov 29, 2022 03:50PM ET
© Reuters. Jefferies raises tanker estimates on strengthened earnings power
By Sam Boughedda
Jefferies raised its price targets on tankers in a note on Tuesday, stating the sector's earnings power has strengthened materially.
The firm remains Buy-rated across all tanker stocks in its coverage universe and raised its target for Ardmore Shipping (NYSE:ASC) to $17 from $16, for DHT Holdings (NYSE:DHT) to $12 from $11, for Euronav (NYSE:EURN) to $21 from $20, Frontline (NYSE:FRO) to $17 from $16, for International Seaways (NYSE:INSW) to $55 from $53, for Nordic American Tanker (NYSE:NAT) to $4.50 from $4, for Scorpio Tankers (NYSE:STNG) to $65 from $60, for Teekay Tankers Ltd (NYSE:TNK) to $44 from $40, and for Tsakos Energy Navigation Ltd (NYSE:TNP) to $26 from $25.
"Crude tanker rates have jumped to new highs last seen in 2008, aside from a brief period in 2020 when oil companies scrambled to secure tankers for floating storage. The tanker sector has been tightly wound for the past several months, leaving little flexibility typically reserved for supply/demand shocks. With charterers now actively booking ships against a framework of the Russian oil ban into Europe, rates have gapped higher. The versatile Suezmax and Aframax tankers are earning in excess of $100,000/day. While it remains to be seen how the price cap on Russian exports will ultimately play out, what is clear is that the tanker fleet is becoming stretched and traveling longer distances," wrote Jefferies analysts.
They also explained that product carriers remain strong on high refinery profitability and throughput while the firm is raising its estimates for Q4 and 2023, with mid-size tankers as best positioned to capitalize on the continually shifting trading patterns.
"We see strong earnings spreading across all segments. We are raising our 4Q VLCC rate forecast to $72,500/day, up from $60,000/day, and raise our 2023 forecast to $57,500/day, from $50,000/day. We see 1Q 2023 as the next peak in tankers, as many of the latest spot fixtures are filtering into the January earnings period," the analysts added. "Tanker equities are currently valued at a free cash flow yield of 25% on 2023 earnings. We find this quite attractive as the majority of tanker companies have highlighted return of capital as the key priority going forward."
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.