Frontline Minor model adjustments
We have trimmed our 2025–2026e EBITDA by 1% after updating our forecasts for the Q4 report and Q1 guidance, and introduce our 2027 estimates. We remain positive on tanker fundamentals, particularly for VLCCs, with ~4% deliveries in 2025–2026e against ~23% of the fleet aged 20+ years at end-2026e. Along with potential catalysts such as sanctions and stricter enforcement (13% of the crude fleet is under sanctions, 11% for VLCCs), and Frontline’s current P/NAV of 0.88x (historical average ~1.2x), we believe the risk is skewed to the upside. We do not consider these changes to be material, and we have not changed our BUY recommendation. We have lowered our target price from NOK305 to NOK295.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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