Frontline (NYSE:FRO) Stock Falls 6.5% - Here's What Happened

Key Points

• Frontline shares fell 6.5% to about $52.60 in midday trading, with volume roughly 25% above the average session level.
• Analyst sentiment remains mixed: four analysts rate the stock Buy, five Hold and two Sell, producing an overall “Hold” rating and an average price target of $45.37.
• Frontline reported quarterly EPS of $2.61, below estimates of $2.74, despite revenue rising 96.5% year over year to $943.3 million. The company increased its quarterly dividend to $2.61, implying a 19.9% annualized yield.

Frontline PLC (NYSE:FRO - Get Free Report) shares fell 6.5% during mid-day trading on Thursday. The company traded as low as $52.62 and last traded at $52.6030. Approximately 4,224,572 shares traded hands during trading, an increase of 25% from the average session volume of 3,371,804 shares. The stock had previously closed at $56.27.

Analyst Upgrades and Downgrades

Several research firms have weighed in on FRO. BTIG Research lifted their target price on Frontline from $55.00 to $70.00 and gave the stock a "buy" rating in a report on Friday, September 18th. Weiss Ratings raised shares of Frontline from a "buy (b)" rating to a "buy (b+)" rating in a research report on Thursday, October 8th. Danske downgraded Frontline from a "hold" rating to a "sell" rating in a research report on Friday, August 21st. DZ Bank cut Frontline from a "hold" rating to a "sell" rating in a report on Friday, August 21st. Finally, Wall Street Zen upgraded shares of Frontline from a "buy" rating to a "strong-buy" rating in a research note on Saturday, August 29th. Four equities research analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat, the stock has an average rating of "Hold" and an average target price of $45.37.

Frontline Stock Down 6.7%

The company has a market capitalization of $11.69 billion, a price-to-earnings ratio of 7.87 and a beta of 0.15. The company has a current ratio of 1.87, a quick ratio of 1.87 and a debt-to-equity ratio of 0.69. The firm's 50-day moving average price is $47.45 and its 200 day moving average price is $40.70.

Frontline (NYSE:FRO - Get Free Report) last posted its earnings results on Friday, August 28th. The shipping company reported $2.61 EPS for the quarter, missing analysts' consensus estimates of $2.74 by ($0.13). The company had revenue of $943.30 million during the quarter, compared to the consensus estimate of $758.89 million. Frontline had a return on equity of 44.24% and a net margin of 49.47%. The firm's revenue was up 96.5% compared to the same quarter last year. During the same period last year, the company posted $0.36 EPS.

Frontline Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Monday, September 28th. Shareholders of record on Friday, September 18th were given a $2.61 dividend. This is a boost from Frontline's previous quarterly dividend of $1.55. The ex-dividend date was Friday, September 18th. This represents a $10.44 dividend on an annualized basis and a dividend yield of 19.9%. Frontline's dividend payout ratio is presently 156.52%.

Institutional Investors Weigh In On Frontline

A number of institutional investors have recently modified their holdings of FRO. Arrowstreet Capital Limited Partnership raised its holdings in shares of Frontline by 4,659.9% in the 1st quarter. Arrowstreet Capital Limited Partnership now owns 5,783,681 shares of the shipping company's stock worth $202,080,000 after purchasing an additional 5,662,172 shares during the period. BlackRock Inc. bought a new position in shares of Frontline in the second quarter worth approximately $50,846,000. Bank of America Corp DE purchased a new position in Frontline in the 2nd quarter worth approximately $30,123,000. Cooper Creek Partners Management LLC bought a new stake in shares of Frontline during the 1st quarter worth $26,911,000. Finally, Canada Pension Plan Investment Board purchased a new stake in Frontline during the second quarter valued at about $22,849,000. 22.70% of the stock is owned by institutional investors.

Frontline Company Profile

Frontline plc NYSE: FRO is a maritime transportation company that owns and operates a fleet of crude oil and refined petroleum product tankers. Its vessels transport energy commodities for oil companies, commodity traders, refineries and other customers in international markets.

The company's fleet primarily includes very large crude carriers (VLCCs), Suezmax tankers and Aframax or LR2 tankers. Frontline generally employs its vessels through a combination of voyage charters, time charters and commercial pool arrangements, allowing it to serve major global shipping routes and connect oil-producing regions with refineries and consuming markets.

Frontline has roots in the Norwegian shipping industry and is associated with shipping entrepreneur John Fredriksen.

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