UPDATE: Stifel Nicolaus Initiates Coverage on Scorpio Tankers with Buy Rating, $13 PT on Multiple Positive Factors

In a report published Thursday, Stifel Nicolaus analyst Benjamin Nolan initiated coverage on Scorpio Tankers STNG with a Buy rating and $13.00 price target. In the report, Stifel Nicolaus noted, “We are initiating coverage of Scorpio Tankers (STNG) with a Buy rating on the shares and $13 target price. Given our expectations for a strengthening refined product tanker charter rate environment over the next two years and Scorpio's leading position in the sector, we believe the shares could appreciate materially as charter rates and earnings rise. The shares are currently trading at 7.6x 2015E EV/EBITDA, which reflects only modest improvements in product tankers rates and is in line with the industry average multiple of 7x-8x. As market fundamentals improve, we believe the shares are likely to trade closer to peak multiple of 8x-9x.” Scorpio Tankers closed on Wednesday at $9.90.