BTIG analyst Gregory Lewis has reiterated their bullish stance on STNG stock, giving a Buy rating on November 6.
Gregory Lewis issued a Buy rating for Scorpio Tankers based on a variety of factors. The company’s strong Q4 forward bookings indicate a likelihood of another quarter of substantial free cash flow. Scorpio Tankers outperformed expectations with an EBITDA of approximately $185M, approximately 7% above consensus. The company also saw better than expected forward Q4 bookings, with roughly half of its Q4 LR2 and MR days already secured at rates higher than the previous quarter. Furthermore, the current spot LR2 rates and MR rates are in the high ranges, indicating a promising return.
In the second quarter, Scorpio Tankers generated nearly $4/share in operating cash flow, indicating an annualized OCF yield of about 30%. The company’s management has emphasized a focus on strengthening the balance sheet and returning cash to shareholders secondarily. The outlook for product tanker rate is bullish, with seaborne refined product exports projected to increase over the next year. The company has also seen a significant increase in shareholder returns, with a 40% increase in the quarterly dividend to $0.35, and a buyback of approximately $91M of shares since the start of Q3. Finally, the company’s ongoing debt reshuffling, which includes repurchasing tankers on expensive sale-leaseback financing, is expected to further strengthen its financial standing.
In another report released on November 6, Cleaves Securities also maintained a Buy rating on the stock with a $77.00 price target.
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Scorpio Tankers (STNG) Company Description:
Scorpio Tankers, Inc. engages in the provision of marine transportation of petroleum products. It operates through the following segments: Handymax, MR, LR1/Panamax, and LR2/Aframax. The company was founded by Emanuele A. Lauro on July 1, 2009 and is headquartered in Monaco.
Read More on STNG:
- Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2023, an Increase to its Quarterly Dividend, and Replenishment of its 2023 Securities Repurchase Program
- STNG Earnings this Week: How Will it Perform?
- Scorpio Tankers price target raised to $63 from $53 at BofA
- Scorpio Tankers management to meet virtually with B. Riley
- Scorpio Tankers price target raised to $88 from $80 at Pareto
