Scorpio Tankers (Buy, TP: USD73.10) - Harbouring further value
The market appears to have left Scorpio Tankers behind in its re-rating of tanker stocks, with our peer group trading at a ~1.0x P/NAV, versus the company’s 20% discount. We continue to find the cash generation potential in Scorpio Tankers substantial, yielding tangible return catalysts as its sizeable liquidity buffer potentially translates to increased shareholder distributions through more buybacks and higher dividends. Against a backdrop of still-strong fundamentals, which should cement consistently strong returns, we reiterate our BUY and have raised our target price to USD73.1 (69.9).
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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