Teekay Tankers (Buy, TP: USD2.00) - Each USD1k/day = USD0.08 EPS
Mid-sized crude tanker rates showed signs of life this winter, with December averaging USD42k/day and USD38k/day for Suezmax and Aframax, respectively. Such rates would imply EPS of USD1.70 for 2020e and a P/E of 0.6x at the current share price, illustrating the group’s high operating leverage. With what we believe is comfortable liquidity leading into the tanker market improving from H2 2019, in our view the current 60% discount to NAV is not justified, and we reiterate our BUY and USD2.00 target price.
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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