Scorpio Tankers (Hold, TP: USD3.40) - Leveraged for asset resurgence
We are broadly in line with consensus ahead of Q3 results (due before market open on 16 November). The post-merger Scorpio Tankers has built up its fleet to 110 owned vessels, and market-adjusted leverage is back at 75% after a 5% drop in asset values since July. Larger than ever, it is well placed for an asset resurgence, but leverage could work both ways if the tanker market does not turn positive soon. While we have cut our target price to USD3.4 (4.10), we keep our HOLD recommendation.
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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