STNG - Scorpio Tankers cut at BofA as normalizing rates pressure earnings outlook
2023-07-21 13:05:24 ET
Scorpio Tankers ( NYSE: STNG ) -2.7% in Friday's trading as Bank of America downgraded the stock to Neutral from Buy with a $45 price target, cut from $60, which the bank said makes it Wall Street's only non-Buy analyst.
The BofA team said it sees rising risk to Scorpio Tankers' ( STNG ) earnings targets as the market moves past peak product tanker rates, leading it to lower its Q2, FY 2023 and FY 2024 EPS estimates to $2.33, $7.55 and $3.10, respectively, from $3.50, $8.70 and $3.15.
BofA lowered its Q2 estimate for fleet average time charter equivalent to $32K/day from $39K/day, which would be the first Y/Y decline, down 16%, after six quarters of increases.
The bank also believes record product tanker tightness has peaked given sensitivity in rates to demand shortfalls, also expecting incremental additions to the shadow fleet serving Russia that may absorb demand for Western carriers.
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Scorpio Tankers cut at BofA as normalizing rates pressure earnings outlook