Scorpio Tankers (Buy, TP: USD83.00) - Fast-tracking distributions
Scorpio Tankers’ strong cash flow has shortened its runway towards its (unofficial) net debt target (we forecast Q2), at which point we see its substantial distribution potential being unleashed as a potential catalyst. We find its 0.83x P/NAV pricing offers investors attractive exposure to its premium-earning fleet generating solid cash flow amid a multi-year upcycle we believe is still in the early stages. We reiterate our BUY and have raised our target price to USD83 (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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