Market Overview

Deutsche Advises Buying Scorpio Tankers On Weakness


Deutsche Bank analyst Amit Mehrotra expects Scorpio Tankers Inc. (NYSE: STNG) to miss estimations in the second quarter. However, the analyst advised investors to buy the shares on weakness.He maintained his Buy rating and retained the price objective of $9.

Mehrotra also moderated his expectations for the second half of the current year, as well as the next year. As a result, Deutsche Bank cut its EPS expectation to $0.42 from $0.83 for the current year, and $1.00 for the year 2017 from the earlier expectation of $1.16.

The analyst indicated his estimations reflected the lower product tanker rate assumptions as he viewed it as "conservative in the outer periods." In any case, the revision is nothing but an indication of the most recent trend, which was downwards.

"Despite the downward revisions we continue to rate STNG shares a Buy and would view any further weakness as a Buying opportunity. Underlying this view are several positive investment points: (1) shares trade at just 4.4x our revised 2017 EPS estimate; (2) 11.5% dividend yield which we view are sustainable and secure; (3) 35% discount to net asset value, which incorporates realistic asset value assumption and $300M remaining capex commitments, and (4) recent ad hoc share repurchase activity (announced on Friday the repurchase of 657k shares @ $4.23 per share)," the analyst said in a note.

The analyst concluded that any weakness after second quarter results should be taken as an advantage to buy the stock as the stock is expected to get re-rated.

The stock traded 4.2 percent down at $4.16 on Tuesday.

Latest Ratings for STNG

Oct 2020JefferiesMaintainsBuy
Oct 2020StifelMaintainsBuy
Sep 2020B of A SecuritiesMaintainsBuy

View More Analyst Ratings for STNG
View the Latest Analyst Ratings


Related Articles (STNG)

View Comments and Join the Discussion!

Posted-In: Amit Mehrotra Deutsche BankAnalyst Color Previews Reiteration Analyst Ratings Trading Ideas

Latest Ratings

OCXBTIGInitiates Coverage On5.0
GCMGWilliam BlairInitiates Coverage On
PDCraig-HallumInitiates Coverage On41.0
CAPLWells FargoDowngrades
MMPWells FargoDowngrades
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.
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