Teekay Tankers (TNK) AI Stock Analysis

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Teekay Tankers

(NYSE:TNK)

Rating:81Outperform

Price Target:

$51.00

▲( 14.53% Upside)

Teekay Tankers' strong financial performance and attractive valuation are the most significant factors driving the score. Positive technical indicators and optimistic earnings call further support the stock's potential, though geopolitical and economic uncertainties present some risk.

Positive Factors

Financial Performance

TNK remains in very strong financial shape with over $500 million of cash, no debt and continues to sell older ships.

Market Dynamics

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

Operational Efficiency

TCE rates remain well above Teekay’s $14,300/day cash breakeven level, providing robust cash generation.

Negative Factors

Earnings Performance

Teekay Tankers posted adj diluted 4Q24 EPS of $1.49, down 48% year-year.

Geopolitical Risks

Teekay Tankers faces concerns from potential tighter US sanctions on crude exports from countries like Iran, Venezuela, and Russia.

Sanctions Impact

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

$1.53B

Dividend Yield2.31%

Average Volume (3M)565.16K

Price to Earnings (P/E)4.8

Beta (1Y)0.54

Revenue Growth-21.27%

EPS Growth-34.25%

CountryUS

Employees2,330

SectorEnergy

Sector Strength46

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)1.21

Shares Outstanding29,756,186

10 Day Avg. Volume542,200

30 Day Avg. Volume565,159

Financial Highlights & Ratios

PEG Ratio-0.28

Price to Book (P/B)0.89

Price to Sales (P/S)0.00

P/FCF Ratio5.06

Enterprise Value/Market Cap0.65

Enterprise Value/Revenue0.21

Enterprise Value/Gross Profit3.32

Enterprise Value/Ebitda0.52

Forecast

1Y Price Target

$46.50

Price Target Upside4.42% Upside

Rating ConsensusHold

Number of Analyst Covering2

Teekay Tankers Business Overview & Revenue Model

Company DescriptionTeekay Tankers (TNK) is a leading provider of marine transportation services for crude oil and refined petroleum products. Operating in the oil and gas transportation sector, the company owns and operates a fleet of oil tankers, including Suezmax, Aframax, and Long Range 2 (LR2) vessels. Teekay Tankers is committed to providing reliable and efficient shipping solutions to its global customer base, ensuring the safe and timely delivery of essential energy commodities.

How the Company Makes MoneyTeekay Tankers generates revenue primarily through the chartering of its fleet to oil companies and traders for the transportation of crude oil and refined petroleum products. The company's primary revenue streams include time-charter contracts, where vessels are hired for a fixed period at a set rate, and spot market voyages, where vessels are contracted for single voyages at prevailing market rates. Additionally, Teekay Tankers benefits from strategic partnerships and alliances within the industry, allowing for optimized fleet deployment and cost efficiencies. The company's earnings are significantly influenced by factors such as global oil demand, tanker supply dynamics, and fluctuations in freight rates.

Teekay Tankers Financial Statement Overview

Summary

Teekay Tankers exhibits strong financial health, characterized by high profitability, robust cash management, and efficient leverage reduction. Despite a recent revenue decline, the company maintains a solid financial position with a notable ability to generate cash and sustain operations.

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
321.26M	380.14M	535.91M	255.95M	-194.09M	219.19M
	EBITDA
427.98M	505.13M	648.42M	364.39M	-103.19M	258.24M
	Net Income Common Stockholders
334.93M	403.67M	513.67M	229.09M	-242.37M	87.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
695.49M	534.33M	365.94M	180.51M	50.57M	97.23M
	Total Assets
2.02B	1.97B	1.87B	1.78B	1.62B	1.84B
	Total Debt
54.02M	62.29M	215.91M	576.20M	654.03M	617.00M
	Net Debt
-621.40M	-449.60M	-150.03M	395.69M	603.46M	519.77M
	Total Liabilities
199.01M	217.42M	347.71M	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 Price44.53

Price Trends

50DMA

39.93

Positive

100DMA

39.74

Positive

200DMA

43.96

Positive

Market Momentum

MACD

1.43

Positive

RSI

58.58

Neutral

STOCH

24.70

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 44.53 is above the 20-day moving average (MA) of 43.89, above the 50-day MA of 39.93, and above the 200-day MA of 43.96, indicating a bullish trend. The MACD of 1.43 indicates Positive momentum. The RSI at 58.58 is Neutral, neither overbought nor oversold. The STOCH value of 24.70 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 (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRO	81 Outperform	$4.08B	11.73	14.79%	9.71%	0.88%	-45.41%
TNK	81 Outperform	$1.53B	4.77	18.57%	2.31%	-21.27%	-34.25%
INSW	80 Outperform	$1.84B	5.77	17.57%	13.79%	-18.74%	-39.64%
DHT	79 Outperform	$1.88B	10.55	17.04%	8.13%	-5.32%	5.51%
STNG	77 Outperform	$2.04B	2.91	24.68%	4.00%	-7.25%	31.85%
GLP	65 Neutral	$1.72B	16.08	16.23%	5.72%	6.04%	18.28%
Sector *	57 Neutral	$7.06B	3.07	-3.48%	5.79%	0.59%	-50.58%

* Energy Sector Average

Performance Comparison

TNK

Teekay Tankers

44.53

-25.44

-36.36%

DHT

DHT Holdings

11.69

0.38

3.36%

FRO

Frontline

18.34

-8.41

-31.44%

GLP

Global Partners

50.66

7.36

17.00%

STNG

Scorpio Tankers

40.05

-38.87

-49.25%

INSW

International Seaways

37.35

-19.79

-34.63%

Teekay Tankers Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -0.93%|

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.