Week 14 Update: Analysts Cut Target Prices for Crude Tankers


Apr. 29 2016, Updated 9:20 a.m. ET

Analysts’ updates

In the first part of this four-part series, we’ll see how analysts changed their recommendations for crude oil tanker stocks in week 14 of 2016. We’ll also discuss how crude tanker stocks performed during the week.

The following are some of the changes analysts made to their recommendations from April 4 to April 10:

  • Fearnley Securities upgraded Frontline (FRO) from “sell” to “accumulate” but reduced the target price for the stock from $10.70 to $8.67. It also upgraded Teekay Tankers (TNK) from “reduce” to “accumulate” but decreased its 12-month target price from $5.50 to $4. On the other hand, Euronav (EURN) has been downgraded from “accumulate” to “reduce,” and its target price has been reduced from $12.50 to $10. Fearnley Securities also reduced DHT Holdings’ (DHT) target price from $8 to $6.50.
  • J.P. Morgan reduced its 12-month target price for Euronav from $16 to $13. Further, it dropped its target price for DHT Holdings from $9 to $8 and its target price for Tsakos Energy Navigation (TNP) from $14 to $11.
  • Drewry Financial Research Services reduced its target price for DHT Holdings (DHT) from $9.90 to $7.40.
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Tanker stocks’ performance last week

For the week ending April 8, all the crude tanker stocks except that of Nordic American Tankers (NAT) ended in negative territory. NAT was flat on the week. The weekly returns for other crude tanker stocks were as follows:

  • Teekay Tankers (TNK) fell 4%.
  • Tsakos Energy Navigation (TNP) fell 2%.
  • Frontline (FRO) fell 8%.
  • Navios Maritime Midstream Partners (NAP) and Euronav (EURN) fell 1%.
  • DHT Holdings (DHT) fell 3%.

Shipping companies account for 19.7% of the Guggenheim Shipping ETF (SEA). SEA rose 1% in week 14. Investors who are interested in broader exposure to the industrials sector can invest in the SPDR Dow Jones Industrial Average ETF (DIA).

Series focus

Having looked at changes in analysts’ recommendations and at tanker stocks’ performance in week 14, we’ll see how tanker rates changed during the week in the next part of this series. In part three of this series, we’ll take a look at the cost side of the tanker industry by reviewing bunker fuel costs. In the final part of this series, we’ll assess the tanker industry’s valuation.


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