INSW - Euronav raised to Buy at Stifel; tankers are 'cash machines'

2023-04-25 15:38:06 ET

Euronav ( NYSE: EURN ) is upgraded to Buy from Hold with a $22 price target, raised from $17, at Stifel, which said the uncertainty over a possible merger has been resolved and the stock can now be valued on its own merits.

Stifel also expects Euronav ( EURN ) should be able to pay $1.68/share in dividends, which translates to a 9.4% yield, and believes the floating dividend policy will be reinstated.

Tankers currently are "cash machines," and while OPEC+ cuts are a "minor annoyance," it does little to the medium-term cash flow generation and dividend potential of the group.

Stifel's favorite name in the tanker group is International Seaways ( INSW ), which it said is trading at the largest discount relative to net asset value and with an expected 9.3% dividend yield.

The firm's other Buy-rated names in the maritime shipping sector are Ardmore Shipping ( ASC ), Genco Shipping ( GNK ), Star Bulk Carriers ( SBLK ), Navigator Holdings ( NVGS ), Scorpio Tankers ( STNG ), Eagle Bulk ( EGLE ) and DHT Holdings ( DHT ).

More on Euronav:

• See financial and valuation comparisons to sector peers
• SA analysis: Euronav may not be able to benefit from market conditions
• Stock price return: 7% gain YTD, 47.5% gain in the past 12 months

For further details see: