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Scorpio Tankers (STNG)
NYSE:STNG
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Scorpio Tankers
(NYSE:STNG)
Rating:79Outperform
Price Target:
$52.00
▲(18.88%Upside)
Positive Factors
Debt Reduction
Scorpio Tankers has significantly reduced its debt by $2.2 billion over the past two years, which has lowered its cash operating breakeven to $12,500 per day.
Price Objective Increase
Despite maintaining a neutral rating, the price objective for Scorpio Tankers has been increased to $52, reflecting a slightly higher 2025 EBITDA estimate.
Strategic Investment
Scorpio Tankers raised its stake in DHT to 7.2%, which could potentially strengthen its position in the market.
Negative Factors
Capacity Increase
The product tanker Orderbook-to-Fleet ratio has climbed to 20% of the fleet, indicating a rising capacity view.
Rate Decline
Rates for LR2 and MR product tankers are softer than anticipated, leading to a decrease in revenue targets.
Revenue Decline
Scorpio Tankers posted 4Q24 revenues of $204 million, down 39% year-year, but $11 million above our estimate.
Scorpio Tankers (STNG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.26B
Dividend Yield3.74%
Average Volume (3M)1.24M
Price to Earnings (P/E)3.2
Beta (1Y)0.42
Revenue Growth-7.25%
EPS Growth31.85%
CountryUS
Employees24
SectorEnergy
Sector Strength42
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)1.03
Shares Outstanding51,016,290
10 Day Avg. Volume1,223,121
30 Day Avg. Volume1,239,410
Financial Highlights & Ratios
PEG Ratio-0.18
Price to Book (P/B)0.70
Price to Sales (P/S)0.00
P/FCF Ratio4.04
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue0.55
Enterprise Value/Gross Profit4.85
Enterprise Value/Ebitda0.79
Forecast
1Y Price Target
$59.86Price Target Upside36.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Scorpio Tankers Business Overview & Revenue Model
Company DescriptionScorpio Tankers Inc. (STNG) is a leading international provider in the transportation of refined petroleum products. The company operates one of the largest fleets of product tankers in the world, serving the global market by transporting gasoline, diesel, fuel oil, and other petroleum-based products. Based in Monaco, Scorpio Tankers focuses on providing efficient and cost-effective shipping solutions, leveraging its modern and high-specification fleet to meet the diverse needs of its customers in the oil and gas industry.
How the Company Makes MoneyScorpio Tankers Inc. primarily generates revenue through the chartering of its fleet of product tankers. The company earns money by entering into time charters, where it leases its vessels to customers for a fixed period, and spot charters, where vessels are hired for single voyages at prevailing market rates. These arrangements allow Scorpio Tankers to capitalize on shipping rate fluctuations. Key revenue streams include voyage revenues from transporting refined petroleum products and time charter revenues from leasing ships. The company's earnings are influenced by factors such as global demand for oil and refined products, charter rates, fleet utilization, and operational efficiency. Strategic partnerships with major oil producers, refiners, and trading companies can also contribute to its revenue by providing consistent business opportunities.
Scorpio Tankers Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 17.23%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
Scorpio Tankers reported strong financial results with significant debt reduction and a positive outlook on the market. However, persistent global uncertainty and geopolitical tensions present challenges. The highlights, particularly in financial performance and operational strength, slightly outweigh the lowlights related to external uncertainties.Q1-2025 Updates
Positive Updates
Strong Financial Results
Scorpio Tankers reported $123 million in adjusted EBITDA and $49 million in adjusted net income for the first quarter of 2025.
Debt Reduction and Balance Sheet Strengthening
The company has reduced debt by $2.2 billion since 2022, expanded revolving credit capacity, and lowered daily cash breakevens to $12,500 per day.
Liquidity Position
Scorpio Tankers has close to $1.4 billion in liquidity, including $400 million in cash and $838 million in undrawn revolving capacity.
Operational Upgrades
Completed special surveys and drydocking for 10 vessels, enhancing vessel efficiency and reducing the need for repositioning voyages.
Positive Market Outlook
Product tanker rates began the second quarter of 2025 at higher levels than the first quarter, with a constructive view on the crude and refined products market.
Negative Updates
Global Uncertainty
Persistent global uncertainty, including policy shifts, tariffs, and geopolitical developments, is clouding visibility and impacting the market.
Tariff Impact on Market
Ongoing tariffs and trade war have caused significant uncertainty in the market, affecting chartering habits and ship values.
Geopolitical Tensions
Geopolitical crosscurrents and sanctions have made the macroeconomic backdrop less predictable, impacting visibility into future market conditions.
Company Guidance
During Scorpio Tankers Inc.'s first quarter 2025 earnings call, the company provided several key metrics and strategic updates. The company reported an adjusted EBITDA of $123.7 million and an adjusted net income of $49 million, or $1.03 per diluted share. Notably, they have significantly reduced their debt by $2.4 billion since December 31, 2021, bringing the net debt balance down to $535 million. The company's liquidity stands at approximately $1.4 billion, which includes $397 million in cash and $838 million in undrawn revolving credit capacity. Scorpio Tankers also highlighted their strategic decision to reduce their daily cash breakeven to $12,500 per day and maintain a diverse capital structure with flexible funding options. Furthermore, they secured additional time charter coverage with LR2 charters extended at $31,000 per day and a new time charter for a Handymax tanker at $24,000 per day. The company remains optimistic about the refined product tanker market, with strong demand, low inventories, and structural shifts in refinery capacity contributing to a positive outlook despite global uncertainties.Scorpio Tankers Financial Statement Overview
Summary
Scorpio Tankers exhibits strong financial health with high profitability margins and efficient cash flow management, despite challenges such as declining revenue and asset management hurdles.Income Statement
Scorpio Tankers has demonstrated robust profitability with a strong net profit margin of 48.1% and a gross profit margin of 54.4% TTM. The EBIT margin stands at 50.3%, reflecting efficient cost management. However, the revenue has shown a declining trend from previous years, which could be a concern for sustaining future growth.85
Very Positive
Balance Sheet
The company has a healthy equity ratio of 73.5%, indicating a strong equity base relative to total assets. The debt-to-equity ratio is 0.33, showing a manageable level of debt. However, total assets have decreased over the years, suggesting that asset management could be improved.75
Positive
Cash Flow
Scorpio Tankers has a positive free cash flow growth of 11.1% TTM, a positive sign of cash generation capability. The operating cash flow to net income ratio of 1.3 TTM indicates strong cash generation relative to earnings. Despite a decline in revenue, the cash flow position remains healthy.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.24B | 1.34B | 1.56B | 540.79M | 915.89M |
| Gross Profit | 894.43M | 809.89M | 939.62M | -37.76M | 328.37M |
| EBITDA | 955.11M | 916.11M | 1.00B | 146.32M | 490.86M |
| Net Income | 668.77M | 546.90M | 637.25M | -380.60M | -62.35M |
Balance Sheet | |||||
| Total Assets | 3.83B | 4.23B | 4.56B | 5.01B | 5.16B |
| Cash, Cash Equivalents and Short-Term Investments | 406.74M | 355.55M | 376.87M | 230.41M | 187.51M |
| Total Debt | 861.97M | 1.59B | 1.93B | 3.12B | 3.05B |
| Total Liabilities | 967.77M | 1.67B | 2.05B | 3.18B | 3.09B |
| Stockholders Equity | 2.87B | 2.55B | 2.51B | 1.84B | 2.07B |
Cash Flow | |||||
| Free Cash Flow | 731.81M | 842.40M | 734.85M | 26.20M | 244.90M |
| Operating Cash Flow | 825.18M | 865.49M | 769.33M | 73.30M | 419.38M |
| Investing Cash Flow | 307.99M | 43.61M | 571.96M | -52.28M | -174.48M |
| Financing Cash Flow | -1.16B | -930.42M | -1.19B | 21.88M | -259.70M |
Scorpio Tankers Technical Analysis
Positive
43.74
Price Trends
41.42
Positive
39.38
Positive
46.31
Negative
Market Momentum
0.92
Negative
55.13
Neutral
43.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STNG, the sentiment is Positive. The current price of 43.74 is above the 20-day moving average (MA) of 42.54, above the 50-day MA of 41.42, and below the 200-day MA of 46.31, indicating a neutral trend. The MACD of 0.92 indicates Negative momentum. The RSI at 55.13 is Neutral, neither overbought nor oversold. The STOCH value of 43.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STNG.
Scorpio Tankers Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $1.89B | 5.92 | 17.57% | 6.25% | -18.74% | -39.64% | |
81 Outperform | $1.19B | 13.28 | 8.71% | 7.18% | -36.98% | -71.55% | |
79 Outperform | $2.26B | 3.21 | 24.68% | 3.74% | -7.25% | 31.85% | |
77 Outperform | $1.76B | 9.92 | 17.04% | 5.48% | -5.32% | 5.51% | |
76 Outperform | $1.51B | 4.81 | 18.57% | 11.44% | -21.27% | -34.25% | |
59 Neutral | £7.28B | -2.82 | -10.36% | 7.15% | -1.03% | -98.53% | |
55 Neutral | $2.10B | ― | -14.83% | 3.85% | -17.81% | -590.48% |
* Energy Sector Average
Performance Comparison
STNG
Scorpio Tankers
43.74
-29.16
-40.00%
DHT
DHT Holdings
11.00
0.57
5.47%
GEL
Genesis Energy
16.86
3.28
24.15%
TNK
Teekay Tankers
44.86
-15.22
-25.33%
LPG
Dorian LPG
28.68
-6.43
-18.31%
INSW
International Seaways
39.27
-11.40
-22.50%
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.