Frontline (NYSE: FRO) shares gained almost 7% on February 17, after the company moved closer to cash-breakeven levels. The company reported revenues that almost doubled the analysts’ expectations aided by a rise in demand as well as rising rates.
Frontline is the world’s fourth-largest oil tanker shipping company, primarily engaged in the transportation of crude oil. FRO shares have risen 14% over the past year.
Q4 Numbers
The company reported an adjusted loss of $0.02 per share, which was much better than the reported loss of $0.18 per share for the prior-year period.
Notably, total operating revenues of $213.5 million significantly exceeded consensus estimates of $111.05 million.
The company reported spot average daily time charter equivalents (TCEs) of $16,500, $14,200, and $13,900 per day for very large crude carriers (VLCCs), Suezmax tankers, and long range 2 product (LR2) tankers, respectively.
CEO Comment
Frontline CEO, Lars H. Barstad, stated “The fourth quarter of the year offered tanker owners some relief. The seasonal uptick, as the northern hemisphere prepared for winter, did materialize, albeit to a modest degree. Rates appreciated firmly, but from decades low levels.”
Looking ahead, he further added, “As the year ended, global oil demand was estimated to have reached 101.0 mbpd, against the backdrop of low oil inventories, twenty year low tanker orderbooks and an increasingly older fleet. Frontline continues to be very constructive for what’s to come this year, as the world continues its volatile path to recovery.”
Wall Street’s Take
Following the Q4 results, H.C. Wainwright analyst Magnus Fyhr maintained a Hold rating on Frontline with a price target of $8 (2.8% downside potential).
Overall, the stock has a Hold consensus rating based on 1 Buy and 3 Holds. At the time of writing, the average Frontline stock price projection was $8.67, which implies 5.35% upside potential from current levels.
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