UPDATE: Imperial Capital Initiates Frontline at Underperform on Crude Tanker Fundamentals

Imperial Capital initiated Frontline

with an Underperform rating and a $1.00 price target. Imperial Capital commented, "Although the recent financial restructuring has extended FROs runway, we believe crude tanker market fundamentals do not point to a near-term recovery and cash flow sweeps/profit sharing clauses inserted into the charter agreements in the 2011 restructuring eliminate much of the potential earnings upside through 2015. Additionally, we think the stock could face potential dilution in the event of another restructuring and/or as a result of addressing the maturity of the 4.5s. The stock currently trades in line with the comp average (13.9x 2013E EBITDA vs. 13.9x average for the peer group)." Frontline closed at $2.05 on Monday.