Scorpio Tankers (Buy, TP: USD35.00) - Dual benefit from IMO 2020
Scorpio Tankers is positioned to get a dual benefit from IMO 2020 if things play out as we envisage. The product tankers are likely to benefit from increased demand through trade volumes, disruption to trade patterns, and increased product price volatility. Also, Scorpio Tankers has beefed up its fleet with scrubbers that add a premium to its pure eco fleet. The flipside is taking on capex in a cash-strapped sector, heightening the risk but also the potential reward. We reiterate our BUY, but have trimmed our target price to USD35 (USD37).
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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