Scorpio Tankers (Buy, TP: USD28.30) - Rates on the rise
Following the Q1 results, we have raised our forecasts on the current market strength, with management’s comments on recent fixture activity leaving room for improvement. Aided by strong Asian demand, the longstanding theme of product dislocation is seemingly bearing fruit. Long-term, we remain positive on supply fundamentals, and find Scorpio Tankers’ mix of attractive pricing (P/NAV of 0.6x) and relatively high leverage (~60%) yielding exciting exposure towards a product tanker recovery. We reiterate our BUY and have increased our target price to USD28.3 (24.3).
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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