UPDATE: Morgan Stanley Upgrades Teekay Tankers On Riding the Crude Tanker Rebound

In a report published Friday, Morgan Stanley analyst Fotis Giannakoulis upgraded the rating on

from Underweight to Equal-Weight, and named a $5.00 price target. In the report, Morgan Stanley noted, “We expect crude tanker rates to stay robust next year as a result of high OPEC output, low crude prices driving oil demand higher and fuel cost lower, and muted near-term fleet supply. We see potential risks if OPEC cuts production and as fleet supply rises in 2016. With the stock above its ~$4/sh NAV and TNK's current low cost of debt expected to rise in 2017, we see balanced risk-reward. Our $5 PT values the stock at 115% EV/Fleet Value and corresponds to 7.8x/11x EBITDA for 2015/16.” Teekay Tankers closed on Thursday at $4.79.