In the week ended August 26, 2016, or Week 34, Morgan Stanley downgraded a few crude (DBO) tanker stocks while reducing the target prices for others. In this article, we’ll take a look at these changes.
Morgan Stanley’s views on the tanker market
Morgan Stanley analyst Fotis Giannakoulis expressed caution on the crude tanker industry’s outlook. According to him, the tanker industry is entering a cyclical downturn that is likely to last through 2018. Giannakoulis also believes that the near-term outlook for crude tankers remains weak, as global oil production has slowed.
Target price changes
Morgan Stanley reduced the target price of Frontline to $7 from $10 and maintained an “equalweight” rating. It also reduced the target price of Nordic American Tankers (NAT) to $9 from $12 and maintained an “equalweight” rating.
Teekay Tankers (TNK) and General Maritime (GNRT) have the same story. Teekay Tankers’ target price was reduced to $2.5 from $3.6, and GNRT’s target price was reduced to $5 from $9. Morgan Stanley maintained “equalweight” recommendations on both stocks.
Tsakos Energy Navigation (TNP) is the only company among its peers with an “overweight” rating by Morgan Stanley. Its target price has also been reduced to $6.5 from $8.
In the next article, we’ll see whether there were any further changes in recommendations or target prices for crude tanker companies in Week 34.