Frontline Ltd

In week 30, the week ending July 27, Evercore downgraded one crude tanker company and revised other companies’ target prices.

In week 30, the week ending July 27, the BDTI rose to 759 from 723. The BDTI has risen ~8.4% in 2018.

On July 17, Morgan Stanley raised Nordic American Tankers’ (NAT) target price to $2.5 from $2.25.

The BDTI can be used to assess the crude tanker industry. In week 29 (week ending July 20), the BDTI fell from 744 to 723.

In Week 28, analysts made no target price revisions or recommendation changes for crude tanker companies.

The consensus 12-month target price for Tsakos Energy Navigation is $5.05, which implies a potential upside of 44.7% from its market price on July 12.

The consensus 12-month target price for Navios Maritime Partners is $4.83, which implies a potential upside of 40.82% from its market price on July 12.

The consensus 12-month target price for Teekay Tankers is $1.69, which implies a potential upside of 43.2% from its July 11 market price.

The consensus 12-month target price for Euronav is $10.89, which implies a potential upside of 22.36% from its market price on July 12.

In week 26, which ended on June 29, none of the analysts revised their recommendations or target prices for crude tanker companies.

Analysts’ consensus rating for Nordic American Tankers (NAT) is 3.33, which means a “hold.”

DHT Holdings (DHT) was the best-performing stock among peers on a YTD basis.

Euronav’s (EURN) YTD (year-to-date) returns were -1% as of June 28.

Nordic American Tankers’ (NAT) YTD (year-to-date) returns were 7% as of June 28.

DHT Holdings’ YTD returns stood at 30.6% as of June 28. The stock is the best performer among its peers so far this year.

Previously, we compared five crude tanker companies’ Q1 2018 revenue. In this article, we’ll look at their Q1 2018 EBITDA.

In this series, we’ll compare crude tanker companies’ performance and their outlook for future quarters.

On June 18, Wells Fargo upgraded DHT Holdings (DHT), Frontline (FRO), and Teekay Tankers (TNK) to “outperform.”

Since the beginning of 2018, the BDTI (Baltic Dirty Tanker Index) has fluctuated between 628 and 781. The year started out with the BDTI at 700.

Shares of Nordic American Tankers (NAT) closed at $2.62 on June 18—21.3% higher than the previous day’s closing price.

According to Reuters, the consensus rating for Frontline (FRO) is 3.33, which means a “hold.”

Analysts’ EBITDA estimate for Frontline in the first quarter is $33.2 million—a 65% decrease from $97.3 million in the first quarter of 2017.

On May 29, DNB Market raised the target price for Frontline to 60 Norwegian kroner from 40 Norwegian kroner.

Analysts estimate net revenues of $85.2 million for Frontline (FRO) in the first quarter. A sequential fall from $178.5 million in the previous quarter.

Euronav (EURN) discussed the crude tanker industry in its 1Q18 conference call. Euronav talked about headwinds and constructive drivers.

Euronav (EURN) and Gener8 Maritime Partners’ (GNRT) merger should close towards the end of 2Q18—subject to Gener8 shareholders’ vote.

The consensus 12-month target price for Frontline is $5.02, which implies a potential upside of 3.7% from the market price on April 19.

On April 20, JPMorgan Chase upgraded Navios Maritime Midstream Partners (NAP) by two notches to “overweight” from “underweight.”

DHT Holdings has the best YTD return as of April 5, 2018, among its peers. Analysts’ consensus rating for DHT Holdings (DHT) is 2.25.

Tsakos Energy Navigation’s (TNP) YTD returns were -12.8% as of April 5, 2018. Tsakos Energy Navigation is the fifth-best performer among its peers YTD.

Gener8 Maritime Partners’ YTD returns were -10% as of April 5, 2018. Gener8 Maritime Partners is the fourth-best performer among its peers YTD.

Euronav’s (EURN) YTD (year-to-date) returns were -9.2% as of April 5, 2018. Euronav is the third-best performer among its peers on a YTD basis.

DHT Holdings’ (DHT) YTD returns were 1.1% as of April 5, 2018. DHT Holdings is the only crude tanker company with a positive YTD return.

Now that we’ve compared crude tanker companies’ 4Q17 performances, let’s discuss analysts’ recommendations.

In this article, we’ll compare the TCE (time charter equivalent) rates these crude tanker companies achieved in 4Q17.

On March 23, 2018, JPMorgan Chase reduced Tsakos Energy Navigation’s (TNP) target price to $5 from $5.5.

In week 10, the week ending March 9, 2018, one analyst revised Tsakos Energy Navigation’s (TNP) target price.

In week 10 of 2018, which ended on March 9, the BDTI dropped to 653 from 669. In week 9, the index rose by 23 points.

In week 9 of 2018, one analyst revised Frontline’s (FRO) target price. On March 1, Evercore reduced Frontline’s target price to $3.5 from $4.

In week 9 of 2018, which ended on March 2, the BDTI rose from 646 to 669. In week 8, the index fell by three points.

In week 8, the week ending February 23, 2018, one analyst revised the target price for Frontline (FRO).

On February 15, 2018, the average bunker fuel price was $400.5 per ton—compared to $416 per ton on February 8.

Navios Maritime Midstream Partners’ (NAP) 4Q17 revenue of $22.7 million fell $0.1 million from the $22.8 million revenue recorded in 4Q16.

On February 1, 2018, the average bunker fuel price was $444 per ton—compared to $445 per ton on January 25.

On December 21, 2017, Euronav (EURN) and Gener8 Maritime Partners (GNRT) announced a stock-for-stock merger.

Analysts expect revenues of $21.18 million for Navios Maritime Midstream Partners in 4Q17—compared to $20.7 million in the previous quarter.

In week three of 2018, which ended on January 19, the BDTI rose from 684 to 705.

On January 19, 2018, J.P. Morgan reduced its target price for Euronav to $8 from $9.

Last week, Brent crude oil prices touched $70 per barrel on Tuesday following preliminary data published by API that US crude oil inventories fell.

In the week ending January 12, 2018, none of the analysts revised their recommendations on crude (DBO) tanker companies.

On January 11, 2018, the average bunker fuel price was $437 per ton—compared to $431 per ton on January 4, 2018.

On January 4, 2018, UBS downgraded Gener8 Maritime Partners (GNRT) to “neutral” from “buy” and raised the target price to $6.75 from $6.5.

On January 4, 2018, the average bunker fuel price was $431 per ton—compared to $413 per ton on December 21, 2017.

One analyst gave a “buy” recommendation, four analysts gave a “hold” recommendation, and one analyst gave a “sell” recommendation for Frontline stock.

The consensus rating for Euronav is a “buy.” Out of the 12 analysts that gave recommendations on Euronav, 67% are bullish on the stock.

Crude tanker rates increased slightly in the fourth quarter. The rates were supported by refineries returning from seasonal maintenance.

None of the analysts revised their recommendations or target prices for crude (DBO) tanker companies in week 51 (week ending December 22, 2017).

On December 21, 2017, Euronav confirmed that it will acquire Gener8 Maritime Partners for ~$493 million in an all-stock transaction.

It hasn’t been a good year for the crude tanker industry. Tanker rates experienced a steep fall this year. VLCC rates have fallen almost 70% year-to-date.

Brent crude oil prices rose to $63.3 per barrel on December 15, 2017, from $62.2 per barrel on December 8, 2017.

Nordic American Tankers offered new equity shares below its recent trading price. It was the main reason behind the recent fall in its stock prices.

China’s crude oil imports from the US were the highest in November. In the past month, almost 289,000 barrels per day of US crude hit China’s shores.

In week 49, which ended on December 8, one analyst revised its target price for Frontline. Deutsche Bank raised Frontline’s target price to $5 from $3.

In Week 47, Morgan Stanley reduced the target price for Frontline (FRO) to $5 from $5.50. In Week 46, Teekay Tankers’ (TNK) target price was reduced to $2 from $5 by Deutsche Bank.

Frontline had 61 vessels in its fleet on September 30. The 61 vessels include 22 VLCCs, 18 Suezmax tankers, 20 LR2/Aframax tankers, and one MR vessel.

Frontline (FRO) stock closed at $5.4 on November 27. The stock is trading 30% lower than its 52-week high and 12% higher than its 52-week low.

In October 2017, China’s automobile sales rose 2% YoY (year-over-year) to 2.7 million. China’s automobile sales have been rebounding since June.

In the third quarter conference call, Teekay Tankers (TNK) gave updates on TNK’s merger with Tanker Investments (TIL).

Teekay Tankers’ (TNK) central cash costs include voyage expenses and vessel operating expenses.

In its third quarter conference call, Teekay Tankers (TNK) gave insights on the tanker market, how it fared in the third quarter, and the outlook for the coming quarters.

The 12-month consensus target price for Frontline is $6.2. Compared to the current market price, the target price implies a potential upside of 7.5%.

In week 45, which ended on November 10, 2017, Teekay Tankers’ (TNK) target price was cut to $1.3 from $1.6 by Bank of America Merrill Lynch.

In week 45, which ended on November 10, 2017, the BDTI fell to 803 from 843. In week 44, it fell by 71 points.

In week 44 (week ending November 3), Wells Fargo reduced the target price for Nordic American Tankers (NAT) to $3.5 from $4.

In week 44, many of the crude tanker stocks traded in the red. Only Frontline and Navios Maritime Midstream Partners traded in the green.

On October 20, 2017, Citigroup raised the target price for Navios Maritime Midstream Partners (NAP) to $8 from $7.

The crude (DBO) tanker index rose in week 41. Aframax rates had enormous gains, while VLCC and Suezmax rates also rose during the week.

None of the analysts have revised their recommendations or target prices for crude oil tanker companies in the past three weeks.

According to preliminary weekly US data, total crude exports have averaged ~0.77 MMbpd in 2017—substantially higher than the same period last year.

China’s oil demand is closely related to its manufacturing activities. Higher manufacturing activities translate to higher demand for oil.

China’s crude oil import: The most important factor An indicator that has a first-degree (direct) influence on tanker rates is China’s crude oil import volume. When import volume rises, more tankers will be in use, which pushes up shipping rates. Conversely, lower import volume means an increased number of idled ships, which leads to increased […]

Navios Maritime Midstream Partners (NAP), an MLP, hasn’t had a good run this year.

DHT Holdings (DHT) stock closed at $4.02 on October 5, 2017. The stock has fallen 2.9% year-to-date.

Most crude oil tanker stocks haven’t had a good year so far. Frontline (FRO) is no exception.

Just like crude tanker rates, most crude tanker stocks also fell in 3Q17.

Oil prices are back in bull market territory. Brent crude oil traded at $59 per barrel on September 25—its highest level in two years.

As we saw in the previous part of this series, crude tanker rates have fallen significantly in 2017—especially in the third quarter.

According to Reuters, the consensus rating for FRO is 3.4, which means a “hold.”

After Tsakos Energy Navigation released its 2Q17 results, Maxim Group reduced its target price to $6 from $7 and maintained a “buy” rating on the stock.

In week 37, Tsakos Energy Navigation (TNP) released its second-quarter earnings. Maxim Group reduced the target price for Tsakos Energy Navigation.

In August 2017, China’s manufacturing PMI (purchasing managers’ index) was 51.7, which was higher than Reuters’ forecast of 51.3.

For 2Q17, analysts estimate that Tsakos Energy Navigation (TNP) will see revenues of $109.8 million, compared with the $138 million we saw in 1Q17.

The crude tanker index rose in week 36. However, crude tanker stocks had a mixed performance. Average VLCC rates rose from multiyear lows.

Frontline (FRO) had 57 vessels in its fleet on June 30, 2017. The 57 vessels include 20 VLCCs (very large crude carriers), 18 Suezmax tankers, 18 LR2/Aframax tankers, and one MR (medium-range) vessel.

Frontline’s (FRO) vessel operating expenses increased by $6.9 million from 1Q17 to $37.5 million in 2Q17.

Frontline (FRO) expects the current market weakness to continue in the short term. It believes the market could improve in 2018 as the pace of newbuild deliveries decelerates and scrapping activity increases.

Wall Street analysts estimate net revenue of $104.3 million for Frontline (FRO) in 2Q17. This compares to $177 million in 1Q17.

Article focus Previously in this series, we saw that crude tanker stocks fell again in Week 33 (ended August 18, 2017). Average VLCC (very large crude carrier) rates rose from multiyear lows, whereas Suezmax rates fell. The cost side proved beneficial for tankers as bunker fuel prices slipped. In this part, we’ll look at analysts’ target prices. […]

Crude tanker companies like Euronav, Frontline, Nordic American Tankers, Teekay Tankers, and DHT Holdings are highly leveraged, which makes their balance sheets vital.

Euronav (EURN) recorded revenues of $126 million in 2Q17—lower than the $164 million it recorded in 1Q17.