SFL Corporation (SFL) AI Stock Analysis

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SFL Corporation

(NYSE:SFL)

Rating:69Neutral

Price Target:

$9.50

▲(0.85%Upside)

SFL Corporation's overall stock score reflects a solid financial foundation and attractive valuation, bolstered by strong dividend yields. However, high leverage, negative free cash flow, and recent earnings challenges, including a net loss and new tariffs, pose risks that need to be managed carefully.

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

Market Cap

$1.34B

Dividend Yield11.46%

Average Volume (3M)1.17M

Price to Earnings (P/E)22.2

Beta (1Y)0.57

Revenue Growth6.68%

EPS Growth-57.55%

CountryUS

Employees24

SectorIndustrials

Sector Strength87

IndustryMarine Shipping

Share Statistics

EPS (TTM)0.03

Shares Outstanding145,236,420

10 Day Avg. Volume899,118

30 Day Avg. Volume1,171,523

Financial Highlights & Ratios

PEG Ratio-0.38

Price to Book (P/B)1.14

Price to Sales (P/S)0.00

P/FCF Ratio-6.84

Enterprise Value/Market Cap2.98

Enterprise Value/Revenue1.15

Enterprise Value/Gross Profit14.62

Enterprise Value/Ebitda1.98

Forecast

1Y Price Target

$12.00

Price Target Upside27.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

SFL Corporation Business Overview & Revenue Model

Company DescriptionSFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters. The company is also involved in the charter, purchase, and sale of assets. In addition, it operates in various sectors of the maritime, and shipping and offshore industries, including oil, chemical, oil product, container, and car transportation, as well as dry bulk shipments and drilling rigs. As of December 31, 2021, the company owned six crude oil tankers, 15 dry bulk carriers, 35 container vessels, two car carriers, one jack-up drilling rig, one ultra-deepwater drilling unit, two chemical tankers, and four oil product tankers. It primarily operates in Bermuda, Cyprus, Liberia, Norway, Singapore, the United Kingdom, and the Marshall Islands. The company was formerly known as Ship Finance International Limited and changed its name to SFL Corporation Ltd. in September 2019. SFL Corporation Ltd. was incorporated in 2003 and is based in Hamilton, Bermuda.

How the Company Makes MoneySFL Corporation generates revenue primarily through long-term charter contracts and leasing agreements for its fleet of vessels. These contracts often involve fixed daily rates, providing predictable cash flows. The company also earns income from profit-sharing arrangements and market exposure through spot market trading. Additionally, SFL benefits from its strategic partnerships and joint ventures with leading global shipping and oil companies, which help to optimize asset utilization and drive profitability. SFL's diversified fleet and flexible business model allow it to capitalize on opportunities across different segments of the maritime industry.

SFL Corporation Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q1-2025)

% Change Since: 11.35%|

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 demonstrates stable revenue and profitability metrics, with moderate revenue growth and consistent operating cash flows. However, high leverage and negative free cash flow pose risks, necessitating careful management of debt and capital expenditures.

Income Statement

Positive

SFL Corporation demonstrated moderate revenue growth, with a notable increase from 2020 to 2024, although revenue slightly declined in TTM. Gross and EBIT margins are fairly stable, indicating efficient cost management. However, the net profit margin has shown volatility, suggesting potential challenges in controlling non-operating expenses. Overall, the income statement reflects a solid but fluctuating profitability trajectory.

Balance Sheet

Positive

The company's balance sheet shows a stable equity base with a consistent equity ratio. The debt-to-equity ratio is relatively high, which could pose risks in case of interest rate increases or downturns in shipping demand. Return on equity is moderate, reflecting effective utilization of equity despite high leverage, which is common in capital-intensive industries like marine shipping.

Cash Flow

Positive

SFL Corporation's cash flow statement highlights consistent operating cash flows, but free cash flow has been negative in recent years due to significant capital expenditures. The operating cash flow to net income ratio indicates strong cash conversion, yet the free cash flow to net income ratio is concerning, suggesting challenges in funding growth through internal cash generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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
EBITDA	563.45M	468.33M	507.93M	343.69M	18.01M
Net Income	130.65M	83.94M	130.06M	76.47M	-346.07M
Balance Sheet
Total Assets	4.11B	3.73B	3.86B	3.46B	3.09B
Cash, Cash Equivalents and Short-Term Investments	138.29M	191.24M	195.65M	166.83M	244.25M
Total Debt	2.84B	2.57B	2.67B	2.41B	2.22B
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 Price9.42

Price Trends

50DMA

8.61

Positive

100DMA

8.24

Positive

200DMA

9.01

Positive

Market Momentum

MACD

0.17

Negative

RSI

61.60

Neutral

STOCH

63.64

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 9.42 is above the 20-day moving average (MA) of 8.86, above the 50-day MA of 8.61, and above the 200-day MA of 9.01, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 61.60 is Neutral, neither overbought nor oversold. The STOCH value of 63.64 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 (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSL	83 Outperform	$1.00B	2.65	27.25%	8.01%	3.94%	19.85%
CMRE	75 Outperform	$1.12B	3.84	12.57%	4.68%	17.77%	-5.90%
NMM	74 Outperform	$1.20B	3.74	11.19%	0.49%	0.28%	-17.08%
DAC	71 Outperform	$1.69B	3.78	14.14%	4.50%	4.93%	-17.08%
SFL	69 Neutral	$1.34B	22.24	5.09%	11.46%	6.68%	-57.55%
GOGL	63 Neutral	$1.67B	14.76	6.06%	9.54%	-7.73%	-39.13%
Sector *	58 Neutral	HK$14.75B	4.74	-3.01%	5.52%	3.67%	-54.16%

* Industrials Sector Average

Performance Comparison

SFL

SFL Corporation

9.42

-1.19

-11.22%

CMRE

Costamare

9.83

-0.33

-3.25%

DAC

Danaos

92.17

11.34

14.03%

GSL

Global Ship Lease

28.87

5.64

24.28%

NMM

Navios Maritime Partners

42.34

-4.47

-9.55%

GOGL

Golden Ocean Group

8.43

-3.10

-26.89%

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.Date of analysis: Jul 03, 2025