Scorpio Tankers (NYSE:STNG) Stock Rating Lowered by Zacks Research

Key Points

• Zacks Research downgraded Scorpio Tankers from “strong buy” to “hold.” The broader analyst consensus is also “hold,” with five buy, five hold and one sell rating and an average price target of $88.14.
• Scorpio Tankers exceeded quarterly expectations. The company reported $4.68 in EPS and $408.73 million in revenue, while revenue increased 77.5% year over year and adjusted EBITDA more than doubled.
• Investors should weigh strong liquidity and capital returns against market risks. The company declared a $0.45 dividend and reported roughly $2 billion in unrestricted cash, but spot rates have declined from recent highs and a $605 million convertible-note issuance could dilute shareholders.

Scorpio Tankers (NYSE:STNG - Get Free Report) was downgraded by investment analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a note issued to investors on Thursday,Zacks.com reports.

Several other equities research analysts have also weighed in on STNG. Bank of America lowered Scorpio Tankers from a "buy" rating to an "underperform" rating and reduced their price objective for the stock from $100.00 to $78.00 in a research note on Tuesday, June 30th. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Scorpio Tankers in a research report on Thursday, June 18th. Jefferies Financial Group started coverage on Scorpio Tankers in a report on Friday, April 24th. They set a "buy" rating and a $90.00 target price for the company. Morgan Stanley set a $82.00 price target on Scorpio Tankers and gave the company an "equal weight" rating in a research report on Thursday, July 9th. Finally, BTIG Research lifted their price target on Scorpio Tankers from $85.00 to $100.00 and gave the stock a "buy" rating in a research note on Tuesday, May 5th. Five equities research analysts have rated the stock with a Buy rating, five have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, Scorpio Tankers currently has a consensus rating of "Hold" and a consensus target price of $88.14.

Scorpio Tankers Trading Up 2.8%

Shares of NYSE:STNG opened at $77.63 on Thursday. The stock has a market capitalization of $3.91 billion, a price-to-earnings ratio of 4.85 and a beta of -0.24. Scorpio Tankers has a 1-year low of $43.78 and a 1-year high of $87.39. The company has a debt-to-equity ratio of 0.16, a quick ratio of 13.87 and a current ratio of 13.98. The company has a 50 day moving average price of $76.89 and a 200 day moving average price of $74.04.

Scorpio Tankers (NYSE:STNG - Get Free Report) last posted its quarterly earnings results on Thursday, July 30th. The shipping company reported $4.68 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.56 by $0.12. The firm had revenue of $408.73 million for the quarter, compared to analyst estimates of $398.25 million. Scorpio Tankers had a net margin of 67.16% and a return on equity of 16.95%. The firm's quarterly revenue was up 77.5% compared to the same quarter last year. During the same quarter in the previous year, the business posted $1.41 earnings per share. On average, research analysts anticipate that Scorpio Tankers will post 11 EPS for the current fiscal year.

Institutional Trading of Scorpio Tankers

A number of hedge funds have recently modified their holdings of the business. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its position in Scorpio Tankers by 4.5% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 26,500 shares of the shipping company's stock valued at $996,000 after buying an additional 1,144 shares during the period. Intech Investment Management LLC increased its holdings in shares of Scorpio Tankers by 9.4% in the 1st quarter. Intech Investment Management LLC now owns 32,478 shares of the shipping company's stock valued at $1,221,000 after purchasing an additional 2,802 shares during the period. Legal & General Group Plc lifted its position in shares of Scorpio Tankers by 11.2% in the second quarter. Legal & General Group Plc now owns 9,985 shares of the shipping company's stock worth $391,000 after purchasing an additional 1,005 shares in the last quarter. EverSource Wealth Advisors LLC boosted its holdings in shares of Scorpio Tankers by 593.1% during the second quarter. EverSource Wealth Advisors LLC now owns 2,807 shares of the shipping company's stock worth $110,000 after purchasing an additional 2,402 shares during the period. Finally, Marshall Wace LLP grew its position in Scorpio Tankers by 3.1% during the second quarter. Marshall Wace LLP now owns 151,604 shares of the shipping company's stock valued at $5,932,000 after purchasing an additional 4,618 shares in the last quarter. Hedge funds and other institutional investors own 54.64% of the company's stock.

Key Stories Impacting Scorpio Tankers

Here are the key news stories impacting Scorpio Tankers this week:

• Positive Sentiment: Adjusted earnings and revenue topped expectations. Q2 adjusted diluted EPS was $4.68, above the $4.51 consensus estimate, while revenue reached $408.7 million versus expectations of $398.3 million. Adjusted net income rose to $243.7 million from $67.8 million a year earlier. Scorpio Tankers Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Operating performance improved sharply. Average daily time-charter-equivalent revenue more than doubled to $52,661 from $25,569, lifting adjusted EBITDA to $300.5 million from $144.5 million. Management attributed the stronger market to longer voyages and trade disruptions related to the Middle East conflict. Scorpio Tankers Q2 Results and Dividend
• Positive Sentiment: Liquidity and capital returns remain attractive. Scorpio Tankers reported approximately $2.0 billion in unrestricted cash, reduced gross debt through vessel sales and repayments, repurchased shares, and declared a $0.45 quarterly dividend payable August 31 to shareholders of record August 17.
• Positive Sentiment: Forward revenue visibility is improving. The company secured three-year time charters for three MR tankers at $23,900-$25,000 per day and continues investing in scrubber-fitted LR2, MR and VLCC newbuildings.
• Neutral Sentiment: Reported net income was boosted by nonrecurring items. Q2 net income of $387.5 million included a $154.1 million vessel-sale gain and a $13.8 million fair-value gain, making adjusted results more relevant for assessing recurring profitability.
• Negative Sentiment: Market and dilution risks remain. Spot rates declined from record highs late in the quarter, while the $605 million convertible-note issuance may dilute shareholders if converted. Higher general and administrative and vessel operating costs also offset part of the benefit from stronger freight rates.

Scorpio Tankers Company Profile

Scorpio Tankers Inc NYSE: STNG is an independent provider of marine transportation services, specializing in the carriage of refined petroleum products. The company’s core operations focus on moving clean petroleum cargoes—such as gasoline, diesel, jet fuel and naphtha—on a global scale. By catering to both spot and time charter markets, Scorpio Tankers enables energy companies, refiners and traders to manage their supply chains with flexibility and reliability.

The company’s fleet is composed of modern, eco-designed product tankers, including medium range (MR) and long range (LR) vessels.

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