TNK - With bottom not yet in for tankers Evercore downgrades a key player

Tanker market equities have been in a "perpetual penalty box" awaiting a return to profitability, Evercore ISI says, observing months of softness that are finally bringing expectations in line with market reality. It's lowering targets to bring them in line. That softness is set to continue with a relatively muted winter and a supply/demand imbalance that will last until oil inventories "normalize" or "vast changes to the fleet (read: record scrapping) unfold." Valuation "disconnects" are irrelevant, the firm says, considering true institutional support will probably lag a rate recovery, not precede it. And liquidity (and the ability to weather a long downturn) are more important now than earnings growth or even possibly capital returns. And while there's unfavorable sentiment that should linger, there is "long-term accretion" being created by management teams: "The tide will turn, it always does, and winners will emerge, and the catalyst is probably the least expected

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With bottom not yet in for tankers, Evercore downgrades a key player