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Teekay Tankers Ltd (TNK)
NYSE:TNK
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Teekay Tankers
(NYSE:TNK)
Rating:77Outperform
Price Target:
$48.00
â–²(8.47%Upside)
Positive Factors
Financial Performance
TCE rates remain well above Teekay’s cash breakeven level, providing robust cash generation.
Fleet Renewal
Teekay Tankers sees opportunities to renew its fleet with recent acquisitions and notes that newbuild prices have softened.
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
Earnings and Market Rates
The recommendation rating for Teekay Tankers is set as UNDERPERFORM with a price objective of $39 due to lower than expected earnings and seasonal market rates.
Geopolitical Uncertainty
TNK is in unprecedented territory regarding geopolitical and trade route uncertainty, which will likely lead to volatility in 2025.
Sanctions and Regulations
Concerns remain about a potential influx of vessels if sanctions on Russia's fleet are lifted, impacting Teekay Tankers negatively.
Teekay Tankers (TNK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.50B
Dividend Yield11.55%
Average Volume (3M)519.01K
Price to Earnings (P/E)4.6
Beta (1Y)0.48
Revenue Growth-21.27%
EPS Growth-34.25%
CountryUS
Employees2,330
SectorEnergy
Sector Strength54
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)1.21
Shares Outstanding29,865,276
10 Day Avg. Volume701,653
30 Day Avg. Volume519,015
Financial Highlights & Ratios
PEG Ratio-0.27
Price to Book (P/B)0.86
Price to Sales (P/S)0.00
P/FCF Ratio4.92
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit3.16
Enterprise Value/Ebitda0.50
Forecast
1Y Price Target
$50.33Price Target Upside13.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 makes money primarily through the operation of its fleet of tankers, which are chartered out to customers for the transportation of crude oil and refined petroleum products. The company's revenue model is based on time charter contracts and spot market voyages. Time charter contracts provide a fixed daily rate for the use of the vessel over a specified period, offering stable and predictable income. In contrast, spot market voyages are single trip charters where rates are determined by current market conditions, allowing Teekay Tankers to capitalize on favorable market dynamics. Additionally, the company may engage in strategic partnerships, joint ventures, and pooling arrangements to optimize fleet utilization and enhance earnings potential. Factors such as global oil demand, shipping capacity, and fuel prices significantly influence Teekay Tankers' financial performance.
Teekay Tankers Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -1.56%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlights strong financial performance, successful vessel sales, and a positive outlook for spot market rates and fleet renewal. However, these positives are tempered by uncertainties related to geopolitical tensions, economic conditions, and an aging global fleet, which could lead to market volatility.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 Q1 2025. The company generated $65 million in free cash flow from operations.
Successful Vessel Sales
Teekay Tankers sold six vessels for total gross proceeds of approximately $183 million, realizing an expected accounting gain of $53 million.
Special Dividends Declared
Teekay Tankers declared a special dividend of $1 per share, alongside a regular quarterly dividend, totaling $1.25 per share.
Rising Spot Market Rates
Spot tanker market rates have strengthened significantly, with secured spot rates of $40,400 and $36,800 per day for Suezmax and Aframax LR2 fleets, respectively.
Fleet Renewal Strategy
Teekay Tankers is actively renewing its fleet by selling older vessels and acquiring more modern tonnage, including a modern LR2 vessel expected to be delivered soon.
Negative Updates
Geopolitical and Economic Uncertainties
The company faces uncertainties due to trade tariffs, geopolitical tensions, and potential economic downturns, which could impact tanker demand.
Aging Fleet Concerns
The global tanker fleet is aging, with an average age of 13.9 years, which could lead to increased scrapping and market rebalancing challenges.
Potential Market Volatility
The market faces potential volatility from geopolitical shifts, including U.S. sanctions and the ongoing war in Ukraine, which could affect tanker demand and pricing.
Company Guidance
During the Teekay Group's first quarter 2025 earnings call, several key metrics and strategic directions were highlighted. Teekay Tankers reported a GAAP net income of $76 million, or $2.20 per share, and an adjusted net income of $42 million, or $1.21 per share. The company generated approximately $65 million in free cash flow from operations during the quarter and announced the sale of six vessels for a total of $183 million, resulting in an expected accounting gain of $53 million. Teekay Tankers declared a regular quarterly dividend of $0.25 per share, alongside a special dividend of $1 per share, culminating in a total dividend payout of $1.25 per share. The firm has paid out $6.25 per share since updating its capital allocation plan in May 2023, with its book equity per share growing by over $21, or over $27 including dividends, to approximately $53 per share as of March 31, 2025. The tanker market is seeing strengthened spot rates, with secured rates of $40,400 per day for Suezmax and $36,800 per day for Aframax LR2 fleets. Teekay Corporation also declared a special dividend of $1 per share. Looking forward, Teekay expects continued strong cash flow generation, with a focus on fleet renewal through selling older vessels and acquiring modern tonnage, as well as leveraging market conditions for further opportunities.Teekay Tankers Financial Statement Overview
Summary
Teekay Tankers demonstrates strong financial health with impressive profitability and cash management. Despite a decline in revenue, the company maintains a solid equity base and low leverage risk.Income Statement
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.82
Very Positive
Balance Sheet
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.75
Positive
Cash Flow
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.78
Positive
| 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
Positive
44.25
Price Trends
43.94
Positive
40.71
Positive
42.79
Positive
Market Momentum
-0.27
Positive
51.37
Neutral
36.33
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 44.25 is below the 20-day moving average (MA) of 44.48, above the 50-day MA of 43.94, and above the 200-day MA of 42.79, indicating a neutral trend. The MACD of -0.27 indicates Positive momentum. The RSI at 51.37 is Neutral, neither overbought nor oversold. The STOCH value of 36.33 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 (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $2.17B | 3.08 | 24.68% | 3.82% | -7.25% | 31.85% | |
81 Outperform | $1.94B | 6.08 | 17.57% | 6.20% | -18.74% | -39.64% | |
77 Outperform | $1.50B | 4.64 | 18.57% | 11.55% | -21.27% | -34.25% | |
74 Outperform | $1.77B | 9.97 | 17.04% | 5.48% | -5.32% | 5.51% | |
73 Outperform | $3.88B | 11.16 | 14.79% | 4.24% | 0.88% | -45.41% | |
67 Neutral | $1.79B | 16.72 | 16.23% | 5.68% | 6.04% | 18.28% | |
52 Neutral | C$2.91B | -1.09 | -3.26% | 6.12% | 5.32% | -43.41% |
* Energy Sector Average
Performance Comparison
TNK
Teekay Tankers
44.25
-17.95
-28.86%
DHT
DHT Holdings
11.05
1.06
10.61%
FRO
Frontline
17.44
-4.67
-21.12%
GLP
Global Partners
52.67
10.26
24.19%
STNG
Scorpio Tankers
42.45
-33.10
-43.81%
INSW
International Seaways
39.33
-12.28
-23.79%
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.