Education
About Us
Working with TipRanks
Follow Us
Frontline Ltd (FRO)
NYSE:FRO
Top Page
Frontline
(NYSE:FRO)
74Outperform
Frontline (FRO) vs. S&P 500 (SPY)
Market Cap
$3.47B
Dividend Yield12.88%
Average Volume (3M)3.14M
Price to Earnings (P/E)6.8
Beta (1Y)-0.16
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees88
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.23
Shares Outstanding222,622,900
10 Day Avg. Volume3,828,167
30 Day Avg. Volume3,139,216
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.85
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.33Price Target Upside24.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Frontline Business Overview & Revenue Model
Company DescriptionFrontline Ltd. is an international shipping company, which engages in the ownership and operation of oil and product tankers. It also offers the seaborne transportation of crude oil and oil products. The company was founded in 1985 and is headquartered in Hamilton, Bermuda.
How the Company Makes MoneyFrontline Ltd. generates revenue primarily through the operation of its oil tanker fleet. The company earns money by chartering its tankers to customers on short-term and long-term contracts. These contracts can be based on either fixed rates or spot market rates, depending on market conditions and the nature of the agreement. The company's earnings are significantly influenced by global oil demand, shipping rates, and fleet utilization rates. Frontline's strategic alliances and partnerships with key oil producers and traders also contribute to its revenue, providing stable and predictable cash flows. Additionally, the company may engage in sale and purchase transactions of vessels, which can impact its financial performance.
Frontline Financial Statement Overview
Summary
Frontline demonstrates strong revenue growth and operational efficiency. However, challenges with high leverage and negative free cash flow are concerns. While profitability margins are healthy, strategic investments impact liquidity. Careful management of debt and cash flow is essential to maintain financial health.Income Statement
Frontline's revenue has shown strong growth with a TTM revenue growth rate of 13.18% compared to the previous year, indicating positive business momentum. The gross profit margin stands at 36.48%, which is robust for the industry. However, the net profit margin decreased to 26.82% in the TTM period from 36.43% in the previous year, indicating some profitability pressures. EBIT and EBITDA margins are healthy, reflecting good operational efficiency.82
Very Positive
Balance Sheet
Frontline's balance sheet is characterized by a high debt-to-equity ratio of 1.61, signaling significant leverage, which is common in the fossil fuels industry but poses a risk in volatile markets. The return on equity is strong at 23.30%, reflecting effective use of shareholder capital. The equity ratio of 37.37% indicates a moderate level of financial stability.76
Positive
Cash Flow
The operating cash flow to net income ratio of 1.22 demonstrates good conversion of profits into cash. However, free cash flow has been negative, driven by substantial capital expenditures. This is a concern as it suggests reliance on financing to support operations and investments. Free cash flow growth has been negative, highlighting cash flow pressures despite operational profitability.68
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.04B | 1.80B | 1.43B | 749.38M | 1.22B | 957.32M | Gross Profit |
| 744.04M | 776.11M | 481.00M | 30.61M | 536.70M | 278.51M | EBIT |
| 747.30M | 746.67M | 442.80M | 29.85M | 507.80M | 239.52M | EBITDA |
| 1.11B | 1.06B | 725.83M | 217.24M | 628.35M | 357.25M | Net Income Common Stockholders |
| 547.22M | 656.41M | 475.54M | -11.15M | 412.88M | 139.97M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 67.32M | 315.75M | 490.81M | 115.51M | 177.36M | 175.35M | Total Assets |
| 3.08B | 5.88B | 4.78B | 4.12B | 3.92B | 3.70B | Total Debt |
| 1.83B | 3.46B | 2.37B | 2.37B | 2.20B | 2.07B | Net Debt |
| 1.76B | 3.15B | 2.12B | 2.26B | 2.03B | 1.89B | Total Liabilities |
| 1.91B | 3.61B | 2.51B | 2.46B | 2.31B | 2.19B | Stockholders Equity |
| 1.16B | 2.28B | 2.27B | 1.65B | 1.61B | 1.51B |
| Cash Flow | Free Cash Flow | ||||
| -1.72B | -775.24M | 52.93M | -399.47M | -120.26M | 84.22M | Operating Cash Flow |
| 669.06M | 856.18M | 370.89M | 62.93M | 604.06M | 280.19M | Investing Cash Flow |
| -1.75B | -1.24B | -239.47M | -363.06M | -715.97M | -190.57M | Financing Cash Flow |
| 1.12B | 433.07M | 10.03M | 223.55M | 124.18M | 19.86M |
Frontline Technical Analysis
Negative
15.57
Price Trends
16.54
Negative
17.09
Negative
20.17
Negative
Market Momentum
-0.32
Positive
43.50
Neutral
39.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRO, the sentiment is Negative. The current price of 15.57 is below the 20-day moving average (MA) of 16.50, below the 50-day MA of 16.54, and below the 200-day MA of 20.17, indicating a bearish trend. The MACD of -0.32 indicates Positive momentum. The RSI at 43.50 is Neutral, neither overbought nor oversold. The STOCH value of 39.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRO.
Frontline Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.23B | 3.15 | 23.93% | 2.78% | -16.00% | -23.43% | |
74 Outperform | $3.47B | 6.79 | 21.46% | 12.88% | ― | ― | |
73 Outperform | $1.90B | 2.92 | 24.68% | 4.16% | -8.16% | 15.26% | |
73 Outperform | $1.65B | 9.10 | 17.56% | 9.31% | 2.11% | 13.10% | |
70 Outperform | $514.55M | 10.90 | 8.91% | 16.46% | -9.60% | -46.39% | |
63 Neutral | $1.62B | 4.00 | 23.33% | 17.56% | -11.21% | -25.50% | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% |
* Energy Sector Average
Performance Comparison
FRO
Frontline
15.57
-5.74
-26.94%
DHT
DHT Holdings
10.26
0.34
3.43%
NAT
Nordic American Tanker
2.47
-1.05
-29.83%
STNG
Scorpio Tankers
38.04
-31.31
-45.15%
TNK
Teekay Tankers
36.33
-15.00
-29.22%
INSW
International Seaways
33.16
-13.75
-29.31%
Frontline Earnings Call Summary
Earnings Call Date: Feb 28, 2025 | % Change Since: 1.70% | Next Earnings Date: May 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Frontline Ltd., with strong financial performance and cash generation potential offset by challenges in the geopolitical landscape and a decrease in adjusted profit. The tanker market shows potential for growth, but geopolitical uncertainties and declining global oil exports pose risks.Highlights
Profit and Strong Liquidity
Frontline Ltd. reported a profit of $66.7 million or $0.30 per share, with an adjusted profit of $45.1 million. The company has a strong liquidity position with $693 million in cash and cash equivalents.
Solid Fleet and No Newbuilding Commitments
Frontline Ltd.'s fleet consists of 41 VLCCs, 22 Suezmax tankers, and 18 LR2 tankers, with an average age of 6.6 years. 99% of the vessels are eco-vessels and 56% are scrubber-fitted. There are no newbuilding commitments and no meaningful debt maturities until 2028.
Substantial Cash Generation Potential
Frontline Ltd. has a cash generation potential of $447 million or $2.01 per share at current fleet and spot market earnings, with a 30% increase from current spot market potentially increasing cash generation by about 80%.
Stable Oil Supply and Demand
Global oil consumption averaged 103.4 million barrels in Q4, expected to reach 104.5 million barrels by year-end. Global supply was up 600,000 barrels per day, with OPEC maintaining production cuts.
Aging Fleet and Manageable Order Book
The average tanker fleet age is 13.7 years, with a significant portion expected to be replaced over the next five years. The order book is manageable, and fleet growth is expected to remain muted for 2025.
Lowlights
Decrease in Adjusted Profit
The adjusted profit for the quarter decreased by about $30 million compared to the previous quarter, mainly due to a decrease in TCE earnings.
Decline in Global Oil Exports
Global oil exports were down 700,000 barrels per day in Q4, with a significant decline of 1.5 million barrels per day in Q4 2023 alone.
Geopolitical and Trade Challenges
The tanker industry faces challenges from geopolitical events, tariffs, sanctions, and the aging fleet. Sanctions and tariffs on countries like Mexico, Canada, China, and the EU could impact trade efficiency.
Impact of Sanctions on Iranian and Russian Oil
Iranian and Russian oil exports have been affected by sanctions, with Iranian crude backing up and complex trade dynamics impacting the compliant tanker fleet.
Company Guidance
In the fourth quarter of 2024, Frontline Ltd. provided guidance on its tanker fleet performance and financial health. The company achieved time charter equivalent (TCE) rates of $35,900 per day for its VLCC fleet, $33,400 per day for the Suezmax fleet, and $26,100 per day for the LR2/Aframax fleet. In the third quarter, 80% of VLCC days were booked at $43,700, 77% of Suezmax days at $35,400, and 64% of LR2/Aframax days at $29,700. Frontline reported a quarterly profit of $66.7 million or $0.30 per share, with an adjusted profit of $45.1 million or $0.20 per share, despite a $30 million decrease in TCE earnings compared to the previous quarter. The company maintained a strong liquidity position with $693 million in cash and cash equivalents and no significant debt maturities until 2028. The fleet, comprising 41 VLCCs, 22 Suezmax tankers, and 18 LR2 tankers, had an average age of 6.6 years, with 99% eco-vessels and 56% scrubber-fitted. Estimated cash cost breakeven rates for 2025 were $29,200 per day for VLCCs, $24,000 for Suezmax, and $22,200 for LR2s, with an average fleet estimate of $26,200 per day. Operational expenses for Q4 2024 averaged $7,600 per day for VLCCs, $9,100 for Suezmax, and $7,600 for LR2s. The company projected cash generation potential of $447 million or $2.01 per share, with a 30% increase in spot market rates potentially boosting cash generation by 80%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.