Frontline stock price target raised to $30 by BTIG on strong tanker rates

Investing.com - BTIG has raised its price target on Frontline Ltd. (NYSE:FRO) to $30.00 from $25.00 while maintaining a Buy rating, citing strong tanker rates and positive market dynamics. The positive outlook aligns with broader sector strength, as evidenced by peer company performance metrics available on InvestingPro.

The firm notes that VLCC spot rates finished at $96,000 per day recently, implying approximately $105,000 per day for scrubber-fitted VLCCs. After bottoming at around $27,000 in July, third-quarter VLCC spot rates for scrubber-fitted vessels averaged approximately $45,000 per day.

Product tanker rates have also shown strength, with medium range (MR) rates averaging about $26,000 per day in the third quarter and closing at approximately $23,000 per day in the most recent session. BTIG highlights that the fourth and first quarters are seasonally the strongest for tanker rates, suggesting favorable conditions for the upcoming winter market.

Recent sales and purchase activity indicates firming vessel values, with Scorpio Tankers’ (NYSE:STNG) sale of a five-year-old MR for $42 million last month pointing to a 5%-10% price rebound from earlier this year. Similarly, International Seaways (NYSE:INSW), currently trading at a P/E ratio of 10.07 with a market capitalization of $2.39 billion, acquired a five-year-old VLCC last month for approximately $119 million, suggesting a 5%-6% price rebound for modern VLCCs. InvestingPro analysis indicates the company is currently undervalued, with 10 additional ProTips available for subscribers.

While BTIG sees upside potential for both product and crude tanker values, it notes that implied five-year-old MR vessel values remain roughly 10%-15% below last year’s peak, while implied five-year-old VLCC values have reached multi-year highs. International Seaways operates with moderate debt levels and has maintained strong returns over the past three months, according to InvestingPro data.

In other recent news, International Seaways reported its Q2 2025 earnings, revealing an adjusted earnings per share (EPS) of $1.02, which was slightly below analysts’ expectations of $1.04. However, the company’s revenue reached $195.64 million, narrowly beating the forecast of $195.61 million. In another development, International Seaways has successfully placed $250 million of new senior unsecured bonds in the Nordic bond market. These bonds will mature in September 2030 and carry a fixed coupon of 7.125% per annum, payable semi-annually. The company also plans to list these bonds on the Oslo Stock Exchange. These recent developments highlight International Seaways’ strategic financial maneuvers and market activities.

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