Ardmore downgraded to Hold on normalizing earnings at Fearnley

Fearnley downgraded Ardmore Shipping to Hold from Buy with a price target of $19, down from $23. The firm sees better risk/reward in very large crude carrier names compared to product tanker equities over the coming 12 months. Product Tanker earnings are normalizing and facing higher supply than ton mile growth, while the VLCCs “look more robust through the low OB and a promising ton mile growth story,” the analyst tells investors in a research note. With risks of run cuts through normalizing crack spreads, Fearnley sees potential for lower than expected volumes next year and pressure on product tanker rates.