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Teekay Corporation (TK)
NYSE:TK
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Teekay
(NYSE:TK)
Rating:80Outperform
Price Target:
$10.00
â–²(29.20%Upside)
Teekay (TK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$650.10M
Dividend Yield25.84%
Average Volume (3M)900.11K
Price to Earnings (P/E)5.4
Beta (1Y)0.52
Revenue Growth-23.02%
EPS Growth-38.08%
CountryUS
Employees2,330
SectorEnergy
Sector Strength55
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.17
Shares Outstanding83,560,720
10 Day Avg. Volume906,392
30 Day Avg. Volume900,105
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)0.74
Price to Sales (P/S)0.00
P/FCF Ratio2.52
Enterprise Value/Market Cap7.74
Enterprise Value/Revenue0.95
Enterprise Value/Gross Profit12.78
Enterprise Value/Ebitda2.47
Forecast
1Y Price Target
$10.00Price Target Upside29.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Teekay Business Overview & Revenue Model
Company DescriptionTeekay Corporation (TK) is a leading international provider of marine services and solutions, primarily focused on the transportation of energy. The company operates through various segments, including Teekay LNG Partners L.P., Teekay Tankers Ltd., and Teekay Offshore Partners L.P., offering services such as liquefied natural gas (LNG) transport, oil tanker shipping, and offshore oil production services. With a global presence, Teekay is committed to providing safe, reliable, and cost-effective marine transportation services across the world.
How the Company Makes MoneyTeekay Corporation makes money through its diversified operations in the marine energy sector. Its primary revenue streams come from long-term charter contracts for its fleet of LNG carriers, which provide steady and predictable income. Additionally, Teekay generates revenue from its oil tanker operations, which are more exposed to market spot rates, offering the potential for higher earnings during favorable market conditions. The company also benefits from its offshore production services, which include floating production storage and offloading (FPSO) units that support oil and gas extraction activities. Furthermore, Teekay's strategic partnerships and joint ventures enhance its operational capabilities and expand its market reach, contributing to its overall financial performance.
Teekay Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 11.69%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong financial performance with high net income and cash flow, successful asset sales, and improvements in the spot market. However, geopolitical uncertainties and aging fleet concerns pose potential challenges. The overall sentiment leans towards optimism despite these challenges.Q1-2025 Updates
Positive Updates
Strong Financial Performance
Teekay Tankers reported GAAP net income of $76 million ($2.20 per share) and adjusted net income of $42 million ($1.21 per share) in the first quarter, with approximately $65 million in free cash flow from operations.
Successful Asset Sales
Teekay Tankers sold six vessels for total gross proceeds of approximately $183 million, resulting in an expected accounting gain of approximately $53 million.
Spot Market Improvement
The spot tanker market has strengthened with secured rates of $40,400 per day for Suezmax and $36,800 per day for Aframax LR2 fleets, with 45% of the spot base booked.
Dividend Payout
Declared a regular quarterly fixed dividend of $0.25 per share and a special dividend of $1 per share, amounting to a total dividend payout of $1.25 per share.
Positive Market Dynamics
Rising oil production and shifting trade patterns have increased midsized tanker ton mile demand, with significant increases in exports and long-haul voyages.
Negative Updates
Geopolitical Uncertainties
Potential impacts from US tariffs, sanctions on Russian and Iranian shipping, and geopolitical tensions could affect tanker market dynamics unfavorably.
Aging Fleet Concerns
The tanker fleet continues to age, with the average age reaching 13.9 years, the highest since 2001, presenting challenges in fleet renewal and market balance.
Company Guidance
During the Teekay Corporation's First Quarter 2025 Earnings Call, CEO Kenneth Hvid provided detailed guidance on the company's financial performance and strategic direction. Teekay Tankers reported a GAAP net income of $76 million ($2.20 per share) and an adjusted net income of $42 million ($1.21 per share). The company generated approximately $65 million in free cash flow and declared a regular quarterly dividend of $0.25 per share, alongside a special dividend of $1 per share. Asset sales have been significant, with six vessels sold for gross proceeds of $183 million, resulting in an expected accounting gain of $53 million. The company is executing a fleet renewal strategy, selling older vessels and acquiring modern tonnage, with a focus on maintaining operational leverage in a strong tanker market. Teekay Tankers has secured higher spot rates for the second quarter, booking rates of $40,400 per day for Suezmax and $36,800 per day for Aframax LR2 fleets. The company is also eyeing future fleet renewals, with considerations for potential asset acquisitions as market conditions evolve. Despite market uncertainties, such as geopolitical tensions and oil market fluctuations, the company expects continued cash flow generation and strategic repositioning opportunities in the near to medium term.Teekay Financial Statement Overview
Summary
Teekay demonstrates strong financial management with improved profitability margins and reduced leverage. However, revenue volatility and declining cash flows present potential challenges. The company's strategic debt reduction significantly enhances its financial stability, while strong cost control measures bolster profitability.Income Statement
Teekay's income statement reflects a volatile revenue trajectory with a noticeable decline from 2023 to 2024, where revenue fell from $1.46 billion to $1.22 billion. Despite the revenue drop, the company maintains a strong gross profit margin of 32.3% in 2024, up from 29.5% in 2023, signaling improved cost efficiency. However, net profit margin decreased slightly to 10.96% in 2024 from 10.28% in 2023, indicating challenges in managing operating expenses. The company shows resilience with positive EBIT and EBITDA margins, but revenue volatility poses a risk.72
Positive
Balance Sheet
The balance sheet shows a healthy reduction in total debt from $227 million in 2023 to $65.6 million in 2024, significantly lowering the debt-to-equity ratio to 0.09, enhancing financial stability. The equity ratio remains robust at 32.9% in 2024, indicating a stable capital structure. However, the decrease in stockholders' equity from $732 million in 2023 to $710 million in 2024 suggests potential challenges in generating returns, as reflected in the reduced ROE of 18.84% in 2024 from 20.57% in 2023.68
Positive
Cash Flow
Teekay's cash flow statement shows a strong free cash flow generation of $391.8 million in 2024, despite a reduction from $623 million in 2023. The operating cash flow remains robust at $467 million in 2024, albeit down from $633 million in 2023. The company's ability to convert net income into cash is sound, with an operating cash flow to net income ratio of 3.49 in 2024. The free cash flow to net income ratio also indicates strong cash generation capabilities. Despite these strengths, declining cash flows year-over-year could impact future liquidity.75
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.22B | 1.46B | 1.19B | 682.51M | 1.82B |
| Gross Profit | 393.86M | 580.63M | 293.03M | -49.73M | 559.82M |
| EBITDA | 503.15M | 655.14M | 348.67M | -107.93M | 201.71M |
| Net Income | 133.77M | 150.64M | 209.64M | -277.46M | 90.98M |
Balance Sheet | |||||
| Total Assets | 2.15B | 2.20B | 2.16B | 6.53B | 6.95B |
| Cash, Cash Equivalents and Short-Term Investments | 717.77M | 652.68M | 519.86M | 108.98M | 348.79M |
| Total Debt | 65.55M | 227.20M | 597.39M | 1.01B | 3.82B |
| Total Liabilities | 217.95M | 396.29M | 795.24M | 4.10B | 4.47B |
| Stockholders Equity | 709.76M | 732.28M | 623.46M | 515.05M | 481.41M |
Cash Flow | |||||
| Free Cash Flow | 391.84M | 623.26M | 183.72M | 54.54M | 957.51M |
| Operating Cash Flow | 467.19M | 633.46M | 199.15M | 75.99M | 984.02M |
| Investing Cash Flow | 157.50M | 54.66M | 308.98M | 7.17M | 63.06M |
| Financing Cash Flow | -416.45M | -524.05M | -456.95M | -223.53M | -1.10B |
Teekay Technical Analysis
Positive
7.74
Price Trends
7.38
Positive
6.57
Positive
6.41
Positive
Market Momentum
0.11
Positive
54.71
Neutral
37.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TK, the sentiment is Positive. The current price of 7.74 is above the 20-day moving average (MA) of 7.71, above the 50-day MA of 7.38, and above the 200-day MA of 6.41, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 54.71 is Neutral, neither overbought nor oversold. The STOCH value of 37.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TK.
Teekay Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $650.10M | 5.42 | 18.55% | 25.84% | -23.02% | -38.08% | |
79 Outperform | $1.54B | 4.72 | 18.57% | 11.34% | -21.27% | -34.25% | |
79 Outperform | $1.06B | 12.03 | 7.38% | 1.29% | 6.38% | 9.47% | |
77 Outperform | $614.60M | 4.55 | 9.22% | 8.67% | -3.67% | -8.90% | |
76 Outperform | $134.43M | 2.70 | 10.57% | 5.44% | -2.37% | 32.03% | |
72 Outperform | $1.20B | 11.87 | 12.69% | 13.07% | -3.95% | -2.25% | |
68 Neutral | $15.42B | 10.07 | 6.34% | 5.16% | 4.06% | -67.04% |
* Energy Sector Average
Performance Comparison
TK
Teekay
7.74
1.46
23.25%
TNK
Teekay Tankers
44.08
-16.65
-27.42%
TEN
Tsakos Energy Navigation
20.76
-4.51
-17.85%
NVGS
Navigator Holdings
15.52
-1.29
-7.67%
DLNG
Dynagas LNG Partners
3.60
-0.21
-5.51%
FLNG
FLEX LNG
22.95
-0.89
-3.73%
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.