SFL Corporation (SFL) AI Stock Analysis

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SFL Corporation

(NYSE:SFL)

Rating:66Neutral

Price Target:

$9.50

▲(10.72%Upside)

SFL Corporation's stock score is primarily supported by strong financial performance in terms of revenue and profit growth, along with a high dividend yield. However, significant leverage and negative free cash flow, combined with challenges highlighted in the earnings call, such as impairments and idle assets, weigh on the score. Technical indicators suggest mixed momentum, with short-term bullish signals but longer-term resistance.

SFL Corporation (SFL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.28B

Dividend Yield12.11%

Average Volume (3M)938.03K

Price to Earnings (P/E)21.2

Beta (1Y)0.56

Revenue Growth6.68%

EPS Growth-57.55%

CountryUS

Employees24

SectorIndustrials

Sector Strength90

IndustryMarine Shipping

Share Statistics

EPS (TTM)0.03

Shares Outstanding145,236,420

10 Day Avg. Volume845,937

30 Day Avg. Volume938,029

Financial Highlights & Ratios

PEG Ratio0.14

Price to Book (P/B)1.07

Price to Sales (P/S)0.00

P/FCF Ratio-4.73

Enterprise Value/Market Cap2.87

Enterprise Value/Revenue1.07

Enterprise Value/Gross Profit11.58

Enterprise Value/Ebitda2.36

Forecast

1Y Price Target

$12.00

Price Target Upside39.86% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

SFL Corporation Business Overview & Revenue Model

Company DescriptionSFL Corporation Ltd. is a leading international maritime shipping company that operates in various sectors of the shipping industry, including tankers, bulkers, and offshore services. The company is engaged in the ownership and operation of vessels and follows a diversified business model, providing transportation of crude oil, oil products, dry bulk goods, and other cargoes. SFL Corporation is known for its strong focus on long-term charters and strategic partnerships with industry leaders, ensuring stable revenue streams.

How the Company Makes MoneySFL Corporation makes money primarily through the leasing of its shipping vessels to major international shipping companies and operators under long-term charter agreements. These agreements provide predictable cash flows and reduce exposure to market volatility. The company's revenue streams are diversified across different shipping sectors, including crude oil tankers, dry bulk carriers, and container ships. Additionally, SFL Corporation engages in strategic partnerships and joint ventures, enhancing operational efficiency and expanding its market presence. This diversified approach, along with a focus on asset management and operational excellence, contributes significantly to SFL's earnings.

SFL Corporation Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q1-2025)

% Change Since: 1.42%|

Next Earnings Date:Aug 13, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted consistent dividend payouts and a strong charter backlog, indicating resilience despite market volatility. However, the quarter was marred by a net loss due to impairments and idle assets like the Hercules rig. The new tariffs on Chinese-built and operated ships pose additional challenges. While operational improvements were noted, these were overshadowed by significant financial and strategic challenges.

Q1-2025 Updates

Positive Updates

Consistent Dividend Payout

Announced the 85th consecutive dividend of $0.27 per share, returning over $2.8 billion to shareholders over 85 quarters, representing a yield of approximately 13% based on the share price.

Strong Charter Backlog

Charter backlog stands at $4.2 billion, with more than two-thirds of this from customers with investment-grade ratings, providing unique cash flow visibility and resilience.

High Fleet Utilization

Overall fleet utilization was 98.6%, with shipping fleet utilization at 99.8%, showcasing the high quality of vessel management.

Operational Improvements and Upgrades

Several vessels upgraded in the quarter, boosting cargo intake and fuel efficiency, contributing to higher charter extensions.

Negative Updates

Net Loss for the Quarter

Recorded a net loss of $32 million or $0.24 per share, impacted by impairments on older dry bulk vessels and the Hercules rig being idle.

Impairments on Dry Bulk Vessels

Impairments amounting to $34 million due to difficulties in finding new long-term charters for older vessels, exacerbated by market volatility and recession fears.

Hercules Rig Idle

The Hercules rig has been idle since Q4 2024, with market turmoil and oil price volatility delaying new employment opportunities, affecting financial results.

Impact of New Tariffs

Newly imposed U.S. tariffs and fees on Chinese-built and operated ships could affect approximately 27 vessels in the fleet, primarily car carriers and tankers.

Company Guidance

During the conference call, SFL Corporation provided guidance on its first-quarter performance for fiscal year 2025. The company reported revenues of $193 million and an EBITDA equivalent cash flow of $116 million, with a 12-month EBITDA equivalent totaling $545 million. Despite challenges, such as impairments on older dry bulk vessels and the Hercules drill rig being idle, SFL declared a net loss of $32 million or $0.24 per share. The company continues its dividend tradition, declaring $0.27 per share, representing a yield of approximately 13%. SFL's charter backlog stands at $4.2 billion, with over two-thirds from investment-grade customers, providing strong cash flow visibility. The company also highlighted its capital allocation strategy, which includes repurchasing $10 million worth of shares. Operationally, the fleet's utilization was high, with 98.6% for the shipping fleet and 97.2% overall, including drilling rigs. Despite new tariffs impacting 27 vessels, SFL plans to pass these costs to charters. The company maintains a solid liquidity position, with $174 million in cash and cash equivalents, and plans to continue investing in accretive assets.

SFL Corporation Financial Statement Overview

Summary

SFL Corporation exhibits strong revenue and profit growth with improved margins and ROE. However, high leverage and negative free cash flow due to capital expenditures present potential risks. The company should focus on balancing growth initiatives with debt management and cash flow improvements to sustain its financial health.

Income Statement

Positive

The company has demonstrated strong revenue growth, with a notable increase from $744.3 million in 2023 to $891.6 million in 2024, marking a 19.8% growth rate. Gross Profit Margin increased to 34.7% in 2024 from 31.8% in 2023, indicating improved efficiency. Net Profit Margin also improved from 11.3% to 14.7%, showcasing enhanced profitability. EBIT and EBITDA margins are robust, with slight improvements. Overall, the company shows strength in revenue and profit growth, though it should continue to monitor expense management closely.

Balance Sheet

Positive

The Debt-to-Equity ratio is relatively high at 2.52, indicating significant leverage, which poses potential financial risk. However, the Return on Equity improved to 11.6% in 2024 from 8.1% in 2023, reflecting better utilization of equity. The Equity Ratio remains stable at 27.5%, showing a balanced capital structure. While the company is leveraging effectively for growth, maintaining a high level of debt could be a concern in adverse conditions.

Cash Flow

Neutral

Free Cash Flow has turned negative in 2024 to -$275 million due to high capital expenditures, a decrease from the previous year's positive $78.7 million. The Operating Cash Flow to Net Income ratio is approximately 2.83, illustrating strong cash generation relative to net income, though free cash flow remains a challenge. The company should focus on managing capital expenditures to improve free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
891.62M	744.33M	670.39M	513.40M	471.05M
	Gross Profit
309.14M	236.51M	277.42M	218.33M	204.13M
	EBIT
306.72M	240.18M	275.47M	242.84M	201.37M
	EBITDA
563.45M	468.33M	507.93M	343.69M	18.01M
	Net Income Common Stockholders
130.65M	83.94M	130.06M	76.47M	-346.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
138.29M	191.24M	195.65M	166.83M	244.25M
	Total Assets
4.11B	3.73B	3.86B	3.46B	3.09B
	Total Debt
2.84B	2.57B	2.67B	2.41B	2.22B
	Net Debt
2.70B	2.40B	2.49B	2.27B	2.01B
	Total Liabilities
2.98B	2.69B	2.77B	2.48B	2.30B
	Stockholders Equity
1.13B	1.04B	1.09B	982.33M	795.65M
Cash Flow		Free Cash Flow
-275.00M	78.67M	-247.37M	-288.03M	156.43M
	Operating Cash Flow
369.86M	343.09M	355.13M	293.60M	276.48M
	Investing Cash Flow
-617.50M	-103.89M	-499.09M	-389.05M	176.34M
	Financing Cash Flow
216.70M	-262.06M	178.37M	25.02M	-431.43M

SFL Corporation Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.58

Price Trends

50DMA

7.99

Positive

100DMA

8.44

Positive

200DMA

9.20

Negative

Market Momentum

MACD

0.13

Negative

RSI

62.49

Neutral

STOCH

27.84

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFL, the sentiment is Positive. The current price of 8.58 is above the 20-day moving average (MA) of 8.39, above the 50-day MA of 7.99, and below the 200-day MA of 9.20, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 62.49 is Neutral, neither overbought nor oversold. The STOCH value of 27.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SFL.

SFL Corporation Risk Analysis

SFL Corporation disclosed 61 risk factors in its most recent earnings report. SFL Corporation reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

SFL Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DAC	78 Outperform	$1.58B	3.50	14.14%	3.97%	4.93%	-17.08%
NMM	76 Outperform	$1.14B	3.52	11.19%	0.52%	0.28%	-17.08%
GSL	76 Outperform	$917.55M	2.43	27.25%	8.15%	3.94%	19.85%
CMRE	75 Outperform	$1.09B	3.73	12.57%	5.05%	17.77%	-5.90%
SFL	66 Neutral	$1.28B	21.18	5.09%	12.11%	6.68%	-57.55%
GOGL	66 Neutral	$1.56B	13.76	6.06%	2.56%	-7.73%	-39.13%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%

* Industrials Sector Average

Performance Comparison

SFL

SFL Corporation

8.58

-3.10

-26.54%

CMRE

Costamare

9.19

-1.52

-14.19%

DAC

Danaos

86.75

0.00

0.00%

GSL

Global Ship Lease

26.13

0.19

0.73%

NMM

Navios Maritime Partners

39.03

-7.89

-16.82%

GOGL

Golden Ocean Group

7.90

-3.91

-33.11%

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.