Scorpio Tankers (STNG) PT Lowered to $75 at BTIG

BTIG analyst Gregory Lewis lowered the price target on Scorpio Tankers (NYSE: STNG) to $75.00 (from $85.00) while maintaining a Buy rating.

The analyst commented: "STNG is down ~1% in early morning trading after reporting Q4 earnings (AMC) with adj. EBITDA of ~$105M (incl. ~$16M of share based comp) coming in ~6% above the Street's ~$100M estimate. Q4 operating cash flow (OCF) of ~$61M points to the stock trading at an ~11% annualized OCF yield despite the soft close to the year (Q4 fleetwide dayrate of ~$22k was down ~23% sequentially). STNG's $0.40 dividend represents a ~31% payout of OCF (~3% yield). Looking ahead, STNG booked ~57% of spot MR days at ~$22k (currently, Q1 is on pace to be up ~14% sequentially) and ~60% of LR2 days at ~$29k (on pace to be up ~13% sequentially). We expect product tanker rates to continue their rebound from Q4 lows, averaging 10%-15% higher in Q1, and another 5%-10% in Q2 as ramping refinery capacity east of Suez stretches ton miles. Bottom line: Shifting global refinery capacity should continue to drive product tanker demand, helping absorb the slate of newbuilds delivering this year. Our 2025 OCF estimate of ~$464M points to STNG trading at a ~20% OCF yield, and should provide STNG flexibility to continue making opportunistic investments and returning cash to shareholders. We maintain our Buy rating."

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