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Investing.com - BofA Securities upgraded Scorpio Tankers (NYSE:STNG) from Neutral to Buy on Monday, while raising its price target to $60.00 from $49.00. The company, which currently trades at $53.05 with a P/E ratio of 6.88, has received a "GREAT" financial health rating according to InvestingPro analysis.
The upgrade comes as BofA Securities observes "accelerating cash generation" at Scorpio Tankers, with product tanker rates showing "counter-seasonal strength" at the beginning of the third quarter of 2025, which the firm considers a positive indicator for the typically strong fall season. This view is supported by the company’s impressive gross profit margin of 62.89% and strong liquidity position, with a current ratio of 4.95.
BofA Securities expects rates to continue increasing in the fourth quarter of 2025 due to seasonality and a tightened supply/demand balance resulting from the unwinding of OPEC+ production cuts and EU sanctions on Russia. According to InvestingPro, 4 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s prospects.
The firm’s new $60 price target is based on a 5.25x multiple of its revised 2026 EBITDA estimate, up from the previous 5.0x multiple, though BofA Securities notes it maintains a "below range multiple target" as increasing rates and cash generation are balanced by a rising capacity view.
BofA Securities has increased its earnings per share estimates for Scorpio Tankers, raising its third-quarter 2025 estimate by 39% to $1.66, its full-year 2025 estimate by 7% to $6.15, and its 2026 estimate by 28% to $6.65.
In other recent news, Scorpio Tankers Inc . reported its second-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved earnings per share of $1.41, significantly higher than the forecasted $1.12. Revenue also exceeded projections, reaching $230.23 million compared to the anticipated $217.73 million. In addition to strong earnings, the company secured a five-year charter for its LR2 product tanker, STI Orchard, at a rate of $28,350 per day starting in the third quarter of 2025. Currently, Scorpio’s LR2 vessels are averaging $32,700 per day in the pool and spot market. Jefferies recently raised its price target for Scorpio Tankers to $70, maintaining a Buy rating. The investment firm highlighted rising product tanker rates as a key factor, positioning Scorpio Tankers as a prime beneficiary of this trend. These developments reflect a series of positive updates for the company.
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