FRO - Although Frontline Is Up 83% In 1 Year We Think There Is More To Come
2024-05-17 11:32:39 ET
Summary
- We examine earnings potential from the acquisition of 24 modern VLCCs from Euronav.
- The gearing ratio is expected to increase from 62% to 65% in Q1 2024.
- Favorable supply and demand dynamics over the next two to three years support higher earnings for VLCC.
Frontline logo (Frontline)
Investment Thesis
In July last year, we upgraded Frontline plc ( FRO ) from a Hold stance to that of a Buy stance. At that time, the share price was only $15 and our upgrade was based on our shared optimism with the company's management about the prospects for higher FCF and dividend payments.
In general, our preference is for shipping companies with very little exposure to the spot market. As such, our largest position in this space is in SFL Corporation ( SFL )....
Although Frontline Is Up 83% In 1 Year, We Think There Is More To Come