Scorpio Tankers (Buy, TP: USD20.00) - Fuel economics set to shine
Ahead of the Q4 results, we have updated our estimates to reflect recent vessel divestments, near-term TCE rate forecasts and updated fuel curves – with the latter partly offsetting a decreased fleet size due to Scorpio’s large portion of scrubber-fitted ECO tonnage. In our view, the recent opportune vessel sales should help regain investor confidence as we find the stock attractively valued at a P/NAV of 0.5x. We reiterate our BUY with an adjusted target price of USD20 (21).
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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