Deutsche Bank Downgrades Scorpio Tankers (STNG) to Hold
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Deutsche Bank downgraded Scorpio Tankers (NYSE: STNG) from Buy to Hold with a price target of $4.00 (from $9.00).
Analyst Amit Mehrotra said, "The revisions reflect an over 10% decline in asset values over the last six months and further deterioration in operating cash flows. We also see increased potential for a dividend cut over the next several months, from limited balance sheet flexibility (we est. LTV of 77%) and stillsignificant newbuilding capex (for which mgmt. continues to negotiate financing). While the company maintains strong operating leverage to longterm healthy product tanker fundamentals, the near/mid-term outlook is more uncertain, in our view, given the continued weakness in rates."
Shares of Scorpio Tankers closed at $3.91 yesterday.
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