Teekay Tankers (TNK) AI Stock Analysis

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Teekay Tankers

(NYSE:TNK)

Rating:79Outperform

Price Target:

$51.00

▲(14.99% Upside)

Teekay Tankers' strong financial performance and attractive valuation are the most significant factors contributing to its high score. The company's strategic initiatives and solid financial position, as highlighted in the earnings call, further support its positive outlook. Technical indicators suggest a stable trend, with no immediate risks or opportunities.

Positive Factors

Financial Performance

Time-charter equivalent rates remain well above Teekay’s cash breakeven level, providing robust cash.

Fleet Management

TNK recently acquired a ‘19-built LR2 vessel and sees opportunity for more purchases.

Market Demand

OPEC+ announced a production boost which provides an uplift for Teekay Tankers by adding significantly more barrels to the market, supporting higher demand.

Negative Factors

Capacity Concerns

There is concern about the potential influx of capacity if sanctions are lifted and risk from a rising orderbook.

Earnings Estimates

Declining crude tanker market rates are leading to lower earnings estimates.

Geopolitical Risks

Teekay Tankers CEO Kenneth Hvid noted a potential worst-case outcome of escalating conflict in the Middle East could lead to a closure of the Strait of Hormuz.

Teekay Tankers (TNK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.52B

Dividend Yield4.51%

Average Volume (3M)466.12K

Price to Earnings (P/E)5.5

Beta (1Y)0.56

Revenue Growth-21.71%

EPS Growth-37.58%

CountryUS

Employees2,330

SectorEnergy

Sector Strength45

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)1.41

Shares Outstanding29,900,000

10 Day Avg. Volume734,987

30 Day Avg. Volume466,118

Financial Highlights & Ratios

PEG Ratio-0.15

Price to Book (P/B)0.78

Price to Sales (P/S)1.11

P/FCF Ratio3.45

Enterprise Value/Market Cap0.50

Enterprise Value/Revenue0.68

Enterprise Value/Gross Profit2.54

Enterprise Value/Ebitda1.77

Forecast

1Y Price Target

$50.00

Price Target Upside12.74% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Teekay Tankers Business Overview & Revenue Model

Company DescriptionTeekay Tankers Ltd. provides marine transportation services to oil industries in Bermuda and internationally. The company offers voyage and time charter services; and offshore ship-to-ship transfer services of commodities primarily crude oil and refined oil products, as well as liquid gases and various other products. It also provides tanker commercial and technical management services. As of December 31, 2021, the company owned and leased 48 double-hull oil tankers, time-chartered in two Aframax tankers, and one LR2 tanker. Teekay Tankers Ltd. was incorporated in 2007 and is headquartered in Hamilton, Canada.

How the Company Makes MoneyTeekay Tankers generates revenue primarily through the chartering of its fleet of tankers. The company can earn income through time charters, where vessels are leased for a specific duration at a fixed rate, or spot charters, where vessels are hired for single voyages at market rates. The revenue model is influenced by global oil demand, shipping rates, and freight market fluctuations. Additionally, Teekay Tankers may benefit from operational efficiencies and cost management strategies. Strategic partnerships with oil producers and trading companies enhance its market position, while the cyclical nature of the shipping industry necessitates a focus on fleet utilization and managing operational costs to maximize profitability.

Teekay Tankers Earnings Call Summary

Earnings Call Date:Aug 01, 2025

(Q2-2025)

% Change Since: 4.70%|

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance and strategic fleet renewal efforts, while also acknowledging potential challenges from geopolitical uncertainties and market volatility. The company's solid financial position and expected market tailwinds suggest positive future prospects.

Q2-2025 Updates

Positive Updates

Strong Financial Performance

Teekay Tankers reported GAAP net income of $62.6 million or $1.81 per share and adjusted net income of $48.7 million or $1.41 per share in the second quarter. The company generated approximately $62.8 million in free cash flow from operations.

Debt-Free Balance Sheet

Teekay Tankers ended the quarter with a cash and short-term investment position of $712 million and no debt, enhancing financial flexibility.

Fleet Renewal Strategy

Teekay Tankers is actively executing on its fleet renewal strategy, including selling older vessels and purchasing modern ones. In July, they acquired a modern Suezmax and agreed to acquire the remaining 50% ownership interest in the Hong Kong Spirit VLCC.

Expected Future Growth

Global oil production is expected to increase due to unwinding OPEC+ supply cuts and new production from South America, potentially boosting tanker rates in the second half of the year.

Dividend Declaration

Teekay Tankers declared its regular quarterly fixed dividend of $0.25 per share.

Negative Updates

Volatility in Spot Rates

While spot tanker rates improved during the second quarter, they softened later in the quarter due to normal seasonal trends and geopolitical events such as hostilities between Israel and Iran.

Geopolitical Uncertainties

Complex geopolitical factors such as sanctions on Russia and Iran and changes in OPEC+ production could add volatility to the tanker market.

Aging Global Tanker Fleet

The global tanker fleet continues to age with the average age at a 25-year high of 14 years, with low levels of scrapping, indicating potential future market imbalances.

Company Guidance

During the Teekay Group's Second Quarter 2025 Earnings Conference Call, Kenneth Hvid, President and CEO, provided an extensive overview of the company's financial performance and strategic initiatives. Teekay Tankers reported a GAAP net income of $62.6 million, or $1.81 per share, and an adjusted net income of $48.7 million, or $1.41 per share, for the second quarter. The company generated approximately $62.8 million in free cash flow from operations, ending the quarter with a cash and short-term investment position of $712 million and no debt. Teekay has actively engaged in fleet renewal, agreeing to sell 11 vessels for gross proceeds of $340 million and estimated book gains of $100 million in 2025. The company acquired one modern Suezmax and agreed to acquire the remaining 50% interest in the Hong Kong Spirit VLCC. Spot rates were secured at $31,400 per day for Suezmax and $28,200 per day for Aframax LR2 fleets, with 43% of the spot base booked. Teekay declared a regular quarterly dividend of $0.25 per share. Looking ahead, Teekay anticipates increased tanker demand due to global oil production rises, with OPEC+ unwinding supply cuts and new production from South America. Despite geopolitical uncertainties, Teekay remains well-positioned for future fleet renewal and continued financial strength.

Teekay Tankers Financial Statement Overview

Summary

Teekay Tankers shows strong financial health with high profitability and robust cash management. Despite a recent decline in revenue, the company's low leverage and high equity ratio indicate financial stability.

Income Statement

Very Positive

Teekay Tankers shows impressive profitability with a consistent increase in net income and gross profit margins over the years. The TTM (Trailing-Twelve-Months) data shows a gross profit margin of 26.6% and a net profit margin of 29.8%, indicating strong control over costs and a high conversion of revenue to profit. However, revenue has decreased in recent periods, suggesting some market challenges.

Balance Sheet

Positive

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.03 in the TTM, indicating minimal leverage risk. The equity ratio of 90.1% reflects strong financial stability. However, a decrease in total revenue might pose risks in maintaining these healthy metrics if it persists.

Cash Flow

Positive

Cash flow management appears robust with a positive free cash flow of $318.5 million in the TTM. The operating cash flow to net income ratio of 1.19 indicates efficient conversion of net income into cash. Despite a decline in free cash flow growth rate, the strong cash position supports ongoing operations and strategic investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.12B	1.23B	1.36B	1.06B	542.37M	886.43M
Gross Profit	298.77M	394.30M	572.73M	290.65M	-58.01M	251.42M
EBITDA	427.98M	505.13M	648.42M	364.39M	-103.19M	258.24M
Net Income	334.93M	403.67M	513.67M	229.09M	-242.37M	87.32M
Balance Sheet
Total Assets	2.02B	1.97B	1.87B	1.78B	1.62B	1.84B
Cash, Cash Equivalents and Short-Term Investments	695.49M	534.33M	365.94M	180.51M	50.57M	97.23M
Total Debt	54.02M	62.29M	215.91M	576.20M	654.03M	617.00M
Total Liabilities	199.01M	217.42M	391.51M	713.65M	780.34M	761.34M
Stockholders Equity	1.82B	1.76B	1.53B	1.07B	838.41M	1.08B
Cash Flow
Free Cash Flow	318.50M	396.57M	615.87M	177.84M	-130.89M	331.92M
Operating Cash Flow	399.88M	471.91M	626.07M	193.26M	-109.44M	347.94M
Investing Cash Flow	83.92M	-5.11M	17.26M	51.22M	38.14M	74.52M
Financing Cash Flow	-203.89M	-343.40M	-464.75M	-113.05M	24.08M	-416.10M

Teekay Tankers Technical Analysis

Technical Analysis Sentiment

Positive

Last Price44.35

Price Trends

50DMA

44.15

Positive

100DMA

42.38

Positive

200DMA

41.02

Positive

Market Momentum

MACD

0.13

Positive

RSI

50.81

Neutral

STOCH

40.75

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNK, the sentiment is Positive. The current price of 44.35 is above the 20-day moving average (MA) of 44.25, above the 50-day MA of 44.15, and above the 200-day MA of 41.02, indicating a bullish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 50.81 is Neutral, neither overbought nor oversold. The STOCH value of 40.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TNK.

Teekay Tankers Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STNG	85 Outperform	$2.29B	3.26	24.68%	3.56%	-7.25%	31.85%
INSW	79 Outperform	$2.09B	8.79	12.61%	9.61%	-22.01%	-54.34%
TNK	79 Outperform	$1.52B	5.47	15.78%	4.51%	-21.71%	-37.58%
FRO	77 Outperform	$4.15B	11.91	14.79%	7.13%	0.88%	-45.41%
DHT	75 Outperform	$1.80B	9.48	17.90%	7.23%	-8.89%	21.28%
Sector *	65 Neutral	$14.84B	8.62	2.77%	5.45%	4.51%	-62.52%
GLP	58 Neutral	$1.73B	19.59	13.89%	5.81%	3.74%	-4.49%

* Energy Sector Average

Performance Comparison

TNK

Teekay Tankers

44.35

-10.96

-19.82%

DHT

DHT Holdings

11.20

0.67

6.36%

FRO

Frontline

18.79

-4.58

-19.60%

GLP

Global Partners

50.00

10.51

26.61%

STNG

Scorpio Tankers

44.96

-25.84

-36.50%

INSW

International Seaways

41.64

-4.09

-8.94%

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: Aug 13, 2025