Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 7 Jul, 25 | STNG | Buy | USD 43.33 | USD 45.5 | USD 48.1 | 3 days | Closed |
5.01%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Scorpio Tankers Inc., together with its subsidiaries, engages in the seaborne transportation of refined petroleum products in the shipping markets worldwide. As of March 23, 2023, its fleet consisted of 113 owned, finance leased, or bareboat chartered-in tankers, including 39 LR2, 60 MR, and 14 Handymax with a weighted average age of approximately 7.2 years. The company was incorporated in 2009 and is headquartered in Monaco.
Charter Extensions: Charter extensions on three LR2 vessels at a daily rate of USD31,000 provide stable long-term revenue visibility.
Dividend Return: A quarterly cash dividend of USD0.40 per share was declared, benefiting shareholders directly
TCE Revenue Pressure: Average TCE revenue for Handymax vessels decreased to USD18,240, reflecting weaker spot market conditions for that vessel class
Profit Decline: Net income fell significantly from USD214.2 million in Q1 2024 to USD58.2 million in Q1 2025, indicating a 72.8% year-over-year drop
Scorpio Tankers’ earnings remain highly sensitive to fluctuations in spot market rates and global demand for refined petroleum products, which can materially impact charter rates and vessel utilization
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 43.33 | 39.86 | 45.5 | 48.1 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Financial Performance Overview
For the quarter ended March 31, 2025, Scorpio Tankers Inc. reported a net income of USD58.2 million, representing basic and diluted earnings per share of USD1.26 and USD1.22, respectively. On an adjusted basis, which excludes a USD9.4 million gain on financial assets and a USD0.3 million debt-related loss, the company posted an adjusted net income of USD49.0 million, or USD1.06 basic and USD1.03 diluted earnings per share. This compares unfavorably to the same period in 2024, during which net income stood at USD214.2 million (USD4.29 basic and USD4.11 diluted EPS), and adjusted net income was USD206.6 million (USD4.14 basic and USD3.97 diluted EPS).
Dividend Declaration
The Company’s Board of Directors declared a quarterly cash dividend of USD0.40 per common share on April 30, 2025. The dividend will be payable on June 16, 2025, to all shareholders of record as of May 30, 2025. As of the dividend declaration date, Scorpio Tankers had 51,016,290 common shares outstanding.
Time Charter and TCE Revenue Performance
During the first quarter of 2025, Scorpio Tankers achieved average daily Time Charter Equivalent (TCE) revenues of USD30,137 and USD31,059 for LR2 vessels operating in the pool/spot market and time charters, respectively. MR vessels earned USD20,529 in the pool/spot market and USD23,011 under time charters. Handymax vessels, which were only operating in the pool, generated an average TCE of USD18,240. Notably, in April 2025, the Company secured a two-year time charter for the STI Battersea, a Handymax tanker, at a daily rate of USD24,000.
Recent Charter Extensions
Since the beginning of 2025, charterers of three LR2 vessels—STI Gratitude, STI Gladiator, and STI Guide—have exercised options to extend their respective charters by one year at a rate of USD31,000 per day. These extensions will commence in May and July 2025, providing the Company with continued revenue visibility and stable cash flows.
Capital Management and Financing Activities
Scorpio Tankers has made significant strides in managing its debt profile. In April 2025, it prepaid USD50.0 million under its 2023 USD225.0 Million Revolving Credit Facility, covering all remaining quarterly installment payments except for the final balloon payment. Additionally, in March 2025, the Company redeemed the entire USD70.6 million outstanding balance of its Unsecured Senior Notes due in June 2025. In February 2025, it secured a new USD500.0 million revolving credit facility, bearing interest at SOFR + 1.85% and backed by 26 product tankers.
Bond Issuance and Equity Investment Activities
In January 2025, the Company successfully issued USD200.0 million in senior unsecured bonds in the Nordic market, maturing in 2030 with a 7.50% annual fixed coupon. Since the beginning of the year, Scorpio Tankers has also actively managed its equity investments in DHT Holdings Inc., purchasing 4,295,218 shares at an average price of USD10.67 and selling 700,000 shares at USD11.85. As of April 2025, the Company holds approximately 7.2% of DHT's outstanding common shares.
Securities Repurchase and Share Dilution Details
As of April 30, 2025, the Company retained USD173.4 million under its 2023 Securities Repurchase Program. For the first quarter of 2025, the weighted average number of basic shares outstanding was 46,172,628, and the diluted average, accounting for potentially dilutive restricted shares, was 47,729,905. Dilutive shares from equity incentive plans were excluded when anti-dilutive.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Scorpio Tankers Inc. (NYSE: STNG) at the current market price of USD 43.33, as on July 07, 2025 at 9:05 AM PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas Midstream
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| STNG Scorpio Tankers Inc |
1.27 1.99% | 64.99 | 5.16 | 4.73 | 2.21 | 1.34 | 3.12 | 4.40 |
| ENB Enbridge Inc |
1.08 2.25% | 49.37 | 32.07 | 17.33 | 1.67 | 1.73 | 2.98 | 10.28 |
| EBBNF Enbridge Inc |
- -% | 24.30 | 8.69 | - | 1.66 | - | ||
| ET Energy Transfer LP |
0.32 1.74% | 18.45 | 13.60 | 10.88 | 0.75 | 1.74 | 1.48 | 7.82 |
| EPD Enterprise Products Partners LP |
1.55 4.70% | 34.66 | 10.72 | 9.90 | 1.17 | 2.09 | 1.76 | 9.64 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on July 7, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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