Scorpio Tankers (Buy, TP: USD42.10) - Extraordinary cash flows
Ahead of the Q2 results (due prior to market open on 28 July), we have upped our near-term rate forecasts to reflect the underlying market strength. In turn, we have raised our 2022e EBITDA by 50% and highlight Scorpio Tankers’ cash flow generation potential over the coming quarters. For Q2, we are 14% above consensus EBITDA of USD251m, and find expectations for Q3 far too bearish relative to the current market strength. We reiterate our BUY and have raised our target price to USD42.1 (28.3).
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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