Skip to main content

Market Overview

Euronav, Scorpio Still Best-In-Breed Tankers: Credit Suisse

Share:
  • Tanker rates experienced extreme volatility in Q3, but finished the quarter on a high note.
  • With rates currently near $100k/d, Credit Suisse believes upward Q4 tanker earnings revisions are coming soon.
  • Credit Suisse names Euronav NV (NYSE: EURN) and Scorpio Tankers Inc (NYSE: STNG) as its top picks.

As Q4 kicks off, Credit Suisse analyst Gregory Lewis took a look back at a crazy Q3 for tanker stocks. In a new report, Lewis discusses what happened in Q3, what investors can expect in Q4 and which stocks are Credit Suisse’s top picks.

Volatile Q3

VLCC rates averaged about $50k/d in Q3, but the rate range for the quarter was huge. Rates peaked at about $80k/d in mid-July but dipped as low as about $20k/d in August. MR rates were equally volatile during the quarter.

Despite the volatility, average rates for the quarter were solid, with VLCC rates nearly flat quarter-over-quarter and MR rates up about 10 percent.

Strong Start To Q4

So far in Q4, VLCC rates have averaged about $80k/d and have recently moved close to $100k/d. According to Lewis, VLCC Q4 earnings typically double Q3 earnings over the past 15 years, a trend that he believes could easily continue this year.

“With spot rates at ~$100k and Q3 FFAs pointing to 80k/d we expect upward Q4 earnings revisions,” he explained.

Stock Picks

Credit Suisse names Euronav and Scorpio as its top two tanker stock picks. The firm is projecting a 23 percent operating cash flow yield from Euronav in 2015 and a 20 percent yield from Scorpio.

Credit Suisse also has Outperform ratings on Tsaskos Energy Navigation Ltd. (NYSE: TNP) and Navios Maritime Midstream Partners LP (NYSE: NAP).

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for EURN

DateFirmActionFromTo
Mar 2021HC Wainwright & Co.Initiates Coverage OnBuy
Jan 2021BTIGUpgradesNeutralBuy
Oct 2020JefferiesMaintainsBuy

View More Analyst Ratings for EURN
View the Latest Analyst Ratings

 

Related Articles (STNG + EURN)

View Comments and Join the Discussion!

Posted-In: Credit Suisse Gregory Lewis TankersAnalyst Color Analyst Ratings

Latest Ratings

StockFirmActionPT
HR.UNCIBCMaintains17.0
FDGECIBCMaintains20.0
SNCCIBCMaintains40.0
APENLake StreetInitiates Coverage On12.0
PATHMacquarieInitiates Coverage On69.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com