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Frontline Ltd (FRO)
NYSE:FRO
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Frontline
(NYSE:FRO)
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Rating:68Neutral
Price Target:
$41.00
▲(17.41% Upside)
Action:ReiteratedDate:03/01/26
The score is led by solid financial performance (strong profitability but constrained by elevated leverage and volatile free cash flow) and a very positive earnings outlook with strong forward booking visibility and liquidity. Technicals support the trend but are overextended (high RSI/Stoch), while valuation and dividend yield provide only moderate support given cyclicality.
Positive Factors
Cash flow generation
Frontline's strong operating cash conversion and a 37.6% rise in free cash flow are durable strengths. Reliable cash generation supports dividend funding, debt reduction or opportunistic reinvestment, reducing dependence on external financing across shipping cycles.
Fleet scale and modern average age
A large, modern fleet concentrated in VLCCs gives structural competitive advantages: economies of scale, preferred cargo allocation, and better fuel/operational efficiency. A younger, eco-friendlier fleet lowers long-term compliance costs and improves charter attractiveness.
Strong liquidity and manageable maturities
Substantial liquidity and deferred debt maturities materially reduce short- to medium-term refinancing risk. This balance sheet flexibility enables the company to withstand cyclical downturns, pursue strategic moves, and avoid forced asset sales.
Negative Factors
High leverage
Significant leverage amplifies exposure to demand shocks and interest cost variability in a cyclical shipping industry. Elevated debt constrains financial flexibility for growth or buybacks, and combined with declining ROE it weakens resilience over multiple quarters.
Declining margins and stagnating revenue
Material margin compression alongside stagnant or negative revenue growth signals structural pressure on profitability, likely from lower TCEs or higher operating costs. Persisting margin erosion undermines durable cash flow and reinvestment capacity.
Uncertainty from sanctioned/dark fleet
Ambiguity around sanctioned vessels creates multi-quarter operational and regulatory risk: potential trade exclusions, distorted supply dynamics, and reputational/legal exposure. These structural uncertainties can restrict deployment and revenue realization over time.
Frontline (FRO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.77B
Dividend Yield4.32%
Average Volume (3M)3.38M
Price to Earnings (P/E)12.8
Beta (1Y)0.74
Revenue Growth-13.41%
EPS Growth-60.18%
CountryUS
Employees85
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)1.02
Shares Outstanding222,622,900
10 Day Avg. Volume4,738,399
30 Day Avg. Volume3,379,496
Financial Highlights & Ratios
PEG Ratio-0.54
Price to Book (P/B)1.93
Price to Sales (P/S)2.47
P/FCF Ratio7.25
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue5.39
Enterprise Value/Gross Profit16.44
Enterprise Value/Ebitda11.19
Forecast
1Y Price Target
$27.01Price Target Upside-22.65% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)5.69
Revenue Forecast (FY)$1.89B
Frontline Business Overview & Revenue Model
Company DescriptionFrontline Ltd., a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2021, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Hamilton, Bermuda.
How the Company Makes MoneyFrontline generates revenue primarily through the chartering of its vessels. The company operates on a time charter and spot market basis, where it leases its tankers to oil companies and traders for a specified period or for single voyages, respectively. Revenue is influenced by shipping rates, which can fluctuate based on market demand, fleet utilization, and prevailing oil prices. Additionally, Frontline may engage in long-term contracts with major oil companies, providing a more stable income stream. The company also benefits from operational efficiencies and cost management strategies to maximize profitability. Strategic partnerships with leading oil corporations and participation in joint ventures can further enhance its market position and revenue potential.
Frontline Key Performance Indicators (KPIs)
Any
Spot Time Charter Equivalent By Carrier
Measures the revenue earned per day by each vessel type, providing insight into market conditions and operational efficiency. It highlights which carriers are generating the most income and how well the company is capitalizing on spot market opportunities.
Measures the revenue earned per day by each vessel type, providing insight into market conditions and operational efficiency. It highlights which carriers are generating the most income and how well the company is capitalizing on spot market opportunities.
Data provided by:
The Fly
The FlyFrontline Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a strongly constructive near‑term outlook driven by materially higher TCE earnings, robust booking coverage into 2026, active fleet renewal, large cash generation potential and strong liquidity. Management acknowledged meaningful risks — pronounced volatility driven by index/FFA dynamics, seasonality (a likely summer dip), accelerating order books for 2029+, and ongoing geopolitical/sanctions uncertainty — but framed these as manageable relative to the current favorable supply‑demand setup and Frontline's strategic positioning.Q4-2025 Updates
Positive Updates
Strong Quarterly and Adjusted Profit
Reported profit of $228,000,000 ( $1.20 per share ) for the period and adjusted profit of $30,000,000 ( $1.03 per share ). Management noted adjusted profit increased by $188,000,000 quarter-over-quarter, driven primarily by higher TCE earnings.
Large Increase in TCE Earnings
TCE earnings rose from $248,000,000 in the previous quarter to $424,500,000 this quarter (an increase of ~71% based on those figures), cited as the primary driver of the adjusted profit improvement.
Exceptional VLCC, Suezmax and LR2 TCE Levels and Forward Bookings
Reported Q4 2025 TCE per day: VLCC $7,074,200/day, Suezmax $53,800/day, LR2/Aframax $33,500/day. Forward booking (so far in 2026): 92% of VLCC days at $107,100/day, 83% of Suezmax days at $76,700/day, and 67% of LR2/Aframax days at $62,400/day — providing strong near-term revenue visibility.
Strong Liquidity and Balance Sheet Actions
Management highlighted a solid balance sheet with substantial cash and undrawn revolver capacity. In January 2026 they sold eight older VLCCs generating expected net cash proceeds of approximately $477,000,000 to support liquidity and fleet renewal.
Fleet Renewal and Strategic Newbuild Acquisition
Acquired nine latest‑generation scrubber‑fitted eco VLCC newbuildings from an affiliate; payment plan ~25% in 2026 and 75% on delivery, with intention to finance the acquisition using cash and ~60% long‑term debt. This indicates active fleet renewal to higher‑spec vessels.
Eco‑Focused Fleet with Favorable Age Profile
Fleet composition: 41 VLCCs, 21 Suezmax, 18 LR2; average age 7.5 years, 100% eco vessels and 57% scrubber‑fitted — positioning the company well for compliant long‑haul trades and regulatory scrutiny.
Attractive Cash Generation Potential
Management estimates cash generation potential (based on rates as of Feb 27) of $2,800,000,000 or $12.51 per share, yielding ~34% cash flow yield to the current share price. A +30% market scenario increases potential to $3.7B ($16.84/share); a -30% scenario decreases it to $1.8B ($8.19/share).
Low Operating Break‑even and Controlled OpEx
Estimated average cash breakeven for next 12 months: VLCC ~$25,000/day, Suezmax ~$23,700/day, LR2 ~$23,800/day; fleet average ~$24,300/day (excluding charters ~$23,300/day). Reported Q4 OpEx (including drydock): VLCC $9,600/day, Suezmax $7,600/day, LR2 $12,400/day; fleet average OpEx excluding drydock ~$7,600/day. Ship operating expenses decreased ~$7.1M Q/Q partly due to supplier rebates.
Prudent Commercial Positioning — Short Term Time Charters
Management follows a flexible approach prioritizing spot returns for shareholders but will use time charters selectively (a 'golden rule' around 30% coverage). They reported several one‑year time charters recently, balancing upside capture and revenue stability.
Negative Updates
Extreme Market Volatility and Index‑Driven Moves
Management emphasized 'almost violent' market moves driven by strong use of indices and freight derivatives. Heavy reliance on a thin set of physical fixtures to set large amounts of paper exposure has increased short‑term volatility and creates sudden pricing dislocations.
Seasonality and Risk of a Summer Downturn
Management warned of an almost inevitable seasonal 'summer low' that could significantly reduce rates (timing and magnitude uncertain), noting that even strong current levels may not be sustained throughout the year.
Medium‑Term Supply Risk from Accelerating Ordering (2029+)
Order book is building materially for deliveries from 2029 onward (yards adding VLCC capacity), which could increase supply later in the cycle. Management views supply as manageable near term but flags 2029 as a point to monitor.
Index/FFA Market Dynamics Can Exacerbate Swings
A limited number of physical cargoes versus large paper market exposure can create rapid swings and hedging pressures. Management highlighted the FFA market's vibrancy causing amplified moves, which is a commercial risk to rate stability.
Dark Fleet and Sanctions Uncertainty
The presence and behavior of the 'dark fleet' (sanctioned or non‑compliant tonnage) adds structural uncertainty. While management expects limited reintegration of old non‑compliant vessels if sanctions ease (due to age and scrutiny), geopolitical shifts remain a material risk for trade flows and rates.
Leverage Intention Could Increase Capital Structure Risk
Management stated the company intends to remain levered (citing ~1.4 ship exposure per share due to leverage) and to use debt (e.g., ~60% long‑term financing for newbuilds). While leverage enhances returns, it raises exposure if rates materially deteriorate.
Company Guidance
Management guidance highlighted strong near-term rate visibility and cash generation: Q4 2025 TCEs were reported at $7,074,200/day (VLCC), $53,800/day (Suezmax) and $33,500/day (LR2/Aframax), and 2026 bookings to date cover 92% of VLCC days at $107,100/day, 83% of Suezmax days at $76,700/day and 67% of LR2/Aframax days at $62,400/day; the company reported 2025 profit of $228.0M ($1.20/share) and adjusted profit of $30.0M ($1.03/share), with TCE earnings up to $424.5M from $248.0M the prior quarter and a $7.1M reduction in ship operating expenses. Balance-sheet and fleet actions include “strong liquidity” (cash/equivalents including undrawn revolver and marketable securities), no meaningful debt maturities until 2030, sale of eight first‑generation eco VLCCs for $831.5M (net proceeds ≈ $477M), and purchase of nine latest‑generation scrubber‑fitted eco VLCC newbuilds for an aggregate price disclosed as ~$1,000,000,224 with ~25% payable in 2026 and 75% on delivery (planned ~60% long‑term debt financing). Fleet metrics: 41 VLCCs / 21 Suezmax / 18 LR2, average age 7.5 years, 100% eco vessels (57% scrubber‑fitted); estimated cash breakevens next 12 months ≈ $25,000/day (VLCC), $23,700/day (Suezmax), $23,800/day (LR2) (fleet avg ≈ $24,300/day; excl. charter ≈ $23,300/day); Q4 OpEx incl. drydock: VLCC $9,600/day, Suezmax $7,600/day, LR2 $12,400/day (Q4 fleet avg OpEx excl. drydock $7,600/day). Operational cadence: ~24,400 spot days next 12 months, 27,700 annual earnings days, and cash‑generation potential at current TCEs of $2.8B ($12.51/share, 34% cash‑flow yield) rising to $3.7B ($16.84/share) at +30% or falling to $1.8B ($8.19/share) at −30%.Frontline Financial Statement Overview
Summary
Income statement strength (72) reflects strong profitability in 2022–2024, but results are cyclical with a 2021 loss and margin/revenue softening into 2025. Balance sheet is the main constraint (58) due to elevated leverage and less room for error in weaker markets. Cash flow is supportive (62) with solid operating cash flow, but free cash flow has been inconsistent despite a 2025 rebound.Income Statement
Profitability is strong for most of the period, with high margins in 2022–2024 and solid earnings power overall. Revenue rebounded sharply after 2021 and remains above prior-cycle levels, though 2025 revenue dipped versus 2024 and margins compressed (net margin down to ~19% from ~24% in 2024). The 2021 loss and the clear year-to-year volatility highlight a business profile that can swing meaningfully with market conditions.72
Positive
Balance Sheet
Leverage is consistently elevated, with debt running around ~1.0x–1.6x equity across the period (highest in 2024). Equity has grown since 2020–2021, but total debt remains sizable and the capital structure leaves less room for error if operating conditions soften. Overall asset base is stable, but the balance sheet is best described as workable rather than conservative.58
Neutral
Cash Flow
Cash generation from core operations is generally solid and improved notably after 2021, with operating cash flow exceeding net income in 2023–2025. However, free cash flow is inconsistent: large deficits in 2020, 2021, 2023, and 2024 were followed by a strong rebound in 2025 (free cash flow roughly in line with net income). This pattern suggests meaningful capital spending or working-capital swings that can pressure cash returns in weaker years.62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.97B | 2.05B | 1.80B | 1.43B | 749.38M |
| Gross Profit | 644.05M | 705.68M | 776.11M | 484.33M | 27.23M |
| EBITDA | 921.14M | 1.14B | 1.07B | 739.83M | 211.34M |
| Net Income | 379.08M | 495.58M | 656.41M | 475.54M | -14.96M |
Balance Sheet | |||||
| Total Assets | 5.75B | 6.22B | 5.88B | 4.78B | 4.12B |
| Cash, Cash Equivalents and Short-Term Investments | 253.41M | 417.56M | 315.75M | 490.81M | 115.51M |
| Total Debt | 3.07B | 3.75B | 3.46B | 2.37B | 2.37B |
| Total Liabilities | 3.24B | 3.88B | 3.61B | 2.51B | 2.46B |
| Stockholders Equity | 2.51B | 2.34B | 2.28B | 2.27B | 1.65B |
Cash Flow | |||||
| Free Cash Flow | 669.93M | -178.84M | -775.24M | 52.93M | -399.47M |
| Operating Cash Flow | 682.46M | 736.41M | 856.18M | 370.89M | 62.93M |
| Investing Cash Flow | 24.98M | -483.40M | -1.24B | -239.47M | -363.06M |
| Financing Cash Flow | -869.62M | -147.80M | 433.07M | 10.03M | 223.55M |
Frontline Technical Analysis
Positive
34.92
Price Trends
28.07
Positive
25.81
Positive
22.56
Positive
Market Momentum
2.84
Negative
66.36
Neutral
65.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRO, the sentiment is Positive. The current price of 34.92 is above the 20-day moving average (MA) of 33.21, above the 50-day MA of 28.07, and above the 200-day MA of 22.56, indicating a bullish trend. The MACD of 2.84 indicates Negative momentum. The RSI at 66.36 is Neutral, neither overbought nor oversold. The STOCH value of 65.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRO.
Frontline Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $4.07B | 7.23 | 11.35% | 3.19% | -35.37% | -57.86% | |
81 Outperform | $2.53B | 5.26 | 18.48% | 3.72% | -20.11% | -26.44% | |
74 Outperform | $2.98B | 9.29 | 19.44% | 6.12% | -16.45% | 23.94% | |
69 Neutral | $3.59B | 7.74 | 15.96% | 6.12% | -23.59% | -57.70% | |
68 Neutral | $7.77B | 12.81 | 15.63% | 4.32% | -13.41% | -60.18% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $4.79B | 91.02 | 3.41% | 2.68% | 19.15% | 329.74% |
* Energy Sector Average
FRO
Frontline
34.92
19.47
126.08%
DHT
DHT Holdings
18.54
8.44
83.53%
GLNG
Golar LNG
46.25
13.83
42.64%
STNG
Scorpio Tankers
78.72
40.11
103.88%
TNK
Teekay Tankers
73.20
36.38
98.82%
INSW
International Seaways
72.55
40.25
124.64%
Frontline Corporate Events
Frontline Shareholders Back Board, Auditor and Expanded Capital-Raising Mandate at 2025 AGM
Dec 30, 2025
On 8 December 2025, Frontline plc held its 2025 Annual General Meeting in Limassol, Cyprus, where shareholders received the audited consolidated financial statements for the year ended 31 December 2024 and voted on a series of governance and capital-related resolutions. Shareholders re-elected six directors, elected a new director, re-appointed PricewaterhouseCoopers as auditor with discretion for the board to set fees, and approved total board remuneration not exceeding USD 600,000 for 2025. The meeting also backed two key resolutions excluding shareholders’ pre-emption rights for 12 months from 8 December 2025 on potential public offerings of up to 377,377,111 new ordinary shares and an equivalent volume of convertible securities or options, at a minimum subscription price of USD 1 per security, thereby giving the board substantial flexibility to raise equity or equity-linked capital. In addition, shareholders approved, on an advisory basis, the company’s remuneration report for 2024, reinforcing support for the current executive pay framework and governance structure.
The most recent analyst rating on (FRO) stock is a Sell with a $145.00 price target. To see the full list of analyst forecasts on Frontline stock, see the FRO Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.