Scorpio Tankers (Buy, TP: USD72.00) - Discount gone too far
We believe market concerns regarding a potential reversal of initially beneficial disruptions are overdone as much of the benefit for compliant tankers has already eroded. Hence, at an implied value for a 5-year MR at ~USD21m (versus the 15-year low of USD22m), we see a reinforced attractive entry point to the tankers space, with supportive supply/demand fundamentals and risk skewed to the upside. We reiterate our BUY, but have lowered our target price to USD72 (82).
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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