Teekay Tankers (TNK – Research Report), the Energy sector company, was revisited by a Wall Street analyst yesterday. Analyst Ken Hoexter from Bank of America Securities reiterated a Sell rating on the stock and has a $39.00 price target.
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Ken Hoexter has given his Sell rating due to a combination of factors affecting Teekay Tankers. The company’s fourth-quarter results were in line with expectations, but they suffered from lower-than-expected spot rates due to weak demand from China and other factors, leading to a significant year-over-year decline in earnings. Despite a recent uptick in rates driven by geopolitical factors like sanctions and new trade routes, the company’s financial performance remains a concern as the rates were only slightly above break-even levels.
Additionally, the geopolitical landscape presents uncertainties that could impact future profitability, as the company navigates through issues like potential sanctions and trade route changes. Teekay Tankers is also involved in fleet renewal, selling older vessels, which might not immediately translate into profitability. Furthermore, the analyst has adjusted the valuation multiple downwards due to concerns about an influx of vessels that might occur if certain sanctions are lifted, thereby impacting the market. These factors contribute to the Sell rating with a price objective held at $39.
Hoexter covers the Industrials sector, focusing on stocks such as Westinghouse Air Brake Technologies, XPO, and Knight Transportation. According to TipRanks, Hoexter has an average return of 4.6% and a 51.59% success rate on recommended stocks.