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Scorpio Tankers (STNG)
NYSE:STNG
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Scorpio Tankers
(NYSE:STNG)
73Outperform
Positive Factors
Market Position
Scorpio is well positioned for a global recovery in refined crude oil consumption with an attractive asset base in an improving market environment.
Shareholder Value
STNG repurchased ~3.4M shares at an average price of $73.34, bringing repurchases to ~4M shares which shows strong management action in enhancing shareholder value.
Negative Factors
Bookings Performance
The company's spot LR2, MR, and Handymax Revenue Days bookings were significantly below prior full fourth quarter targets.
Operational Challenges
Fleet time-charter equivalent rates were down 33% year-year for 4Q24 as crude tanker rates fell due to an oversupply of product in Europe.
Revenue Performance
Scorpio Tankers posted 4Q24 revenues of $204 million, down 39% year-year, but $11 million above our estimate.
Scorpio Tankers (STNG) vs. S&P 500 (SPY)
Market Cap
$1.92B
Dividend Yield4.16%
Average Volume (3M)975.98K
Price to Earnings (P/E)3.0
Beta (1Y)-0.05
Revenue Growth-8.16%
EPS Growth15.26%
CountryUS
Employees24
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)13.05
Shares Outstanding49,920,040
10 Day Avg. Volume1,056,485
30 Day Avg. Volume975,982
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)N/A
Price to Sales (P/S)4.73
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$66.40Price Target Upside74.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Scorpio Tankers Business Overview & Revenue Model
Company DescriptionScorpio Tankers Inc. (STNG) is a leading international provider in the transportation of refined petroleum products. The company operates a modern fleet of product tankers, which includes LR2, LR1, MR, and Handymax vessels, catering to major oil companies, national oil companies, and other traders. With its headquarters in Monaco, Scorpio Tankers focuses on maximizing operational efficiency and maintaining high safety and environmental standards in the shipping industry.
How the Company Makes MoneyScorpio Tankers generates revenue primarily through the transportation of refined petroleum products across international waters. The company's key revenue streams include time charter contracts and voyage charters. Under time charters, Scorpio Tankers leases its vessels to customers for a specified period, earning a fixed daily rate. In voyage charters, the company transports cargo for a customer from one port to another and earns revenue based on the cargo volume and distance traveled. Additionally, the company may engage in spot market operations where vessels are hired for single voyages, allowing it to capitalize on short-term market fluctuations. Scorpio Tankers' earnings are influenced by factors such as global oil demand, shipping rates, fuel costs, and fleet utilization rates. The company also benefits from strategic partnerships with major oil companies and traders, which provide long-term charter agreements and stable cash flows.
Scorpio Tankers Financial Statement Overview
Summary
Scorpio Tankers exhibits a strong financial position with robust profitability indicators and effective cost management. The company has demonstrated resilience in a competitive industry, maintaining strong margins and improving its balance sheet health.Income Statement
Scorpio Tankers shows strong financial performance in the TTM with impressive margins. The Gross Profit Margin stands at 61.22%, indicating effective cost management. Net Profit Margin is a robust 52.41%, reflecting strong bottom-line results. Revenue growth from 2023 to TTM is modest at 2.61%, but the company has shown resilience after recovering from a low in 2021. EBIT and EBITDA margins are also strong at 56.86% and 71.34%, respectively, showcasing operational efficiency.85
Very Positive
Balance Sheet
The company's balance sheet reflects a stable financial position. The Debt-to-Equity Ratio has improved, now at 0.32, indicating reduced leverage risk. Return on Equity (ROE) is strong at 25.40%, showcasing effective use of shareholders' capital. The Equity Ratio is high at 73.82%, suggesting a solid capital structure with significant equity financing. The reduction in total liabilities and debt over recent years is a positive sign of financial stability.78
Positive
Cash Flow
Scorpio Tankers has demonstrated strong cash flow management. The Free Cash Flow has grown slightly, indicating consistent operational performance. The Operating Cash Flow to Net Income Ratio is 1.24, showing efficient cash conversion from profits. The Free Cash Flow to Net Income Ratio is healthy at 1.16, reflecting solid cash generation relative to net income. The company has managed to maintain positive free cash flow amidst fluctuating investing and financing activities.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.38B | 1.34B | 1.56B | 540.79M | 915.89M | 704.33M | Gross Profit |
| 842.47M | 809.89M | 939.62M | -37.76M | 328.37M | 192.27M | EBIT |
| 782.46M | 705.15M | 797.71M | -84.83M | 245.33M | 129.97M | EBITDA |
| 981.75M | 916.11M | 1.00B | 146.32M | 490.86M | 343.25M | Net Income Common Stockholders |
| 721.11M | 546.90M | 637.25M | -380.60M | -62.35M | -234.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 593.65M | 355.55M | 376.87M | 230.41M | 187.51M | 202.30M | Total Assets |
| 4.78B | 4.23B | 4.56B | 5.01B | 5.16B | 5.16B | Total Debt |
| 2.91B | 1.59B | 1.93B | 3.12B | 3.05B | 3.12B | Net Debt |
| 2.32B | 1.23B | 1.56B | 2.89B | 2.86B | 2.92B | Total Liabilities |
| 2.95B | 1.67B | 2.05B | 3.18B | 3.09B | 3.19B | Stockholders Equity |
| 1.84B | 2.55B | 2.51B | 1.84B | 2.07B | 1.98B |
| Cash Flow | Free Cash Flow | ||||
| 835.97M | 842.40M | 734.85M | 26.20M | 244.90M | 2.54M | Operating Cash Flow |
| 896.28M | 865.49M | 769.33M | 73.30M | 419.38M | 209.51M | Investing Cash Flow |
| 217.84M | 43.61M | 571.96M | -52.28M | -174.48M | -206.97M | Financing Cash Flow |
| -1.28B | -930.42M | -1.19B | 21.88M | -259.70M | -393.89M |
Scorpio Tankers Technical Analysis
Negative
38.07
Price Trends
46.18
Negative
50.03
Negative
61.68
Negative
Market Momentum
-2.29
Positive
27.25
Positive
23.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STNG, the sentiment is Negative. The current price of 38.07 is below the 20-day moving average (MA) of 41.27, below the 50-day MA of 46.18, and below the 200-day MA of 61.68, indicating a bearish trend. The MACD of -2.29 indicates Positive momentum. The RSI at 27.25 is Positive, neither overbought nor oversold. The STOCH value of 23.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STNG.
Scorpio Tankers Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.37B | 7.43 | 21.46% | 12.88% | ― | ― | |
73 Outperform | $1.92B | 3.02 | 24.68% | 4.16% | -8.16% | 15.26% | |
73 Outperform | $1.65B | 9.56 | 17.56% | 9.29% | 2.11% | 13.10% | |
70 Outperform | $514.55M | 10.90 | 8.91% | 16.46% | -9.60% | -46.39% | |
63 Neutral | $1.65B | 4.19 | 23.33% | 17.20% | -11.21% | -25.50% | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% |
* Energy Sector Average
Performance Comparison
STNG
Scorpio Tankers
38.07
-29.03
-43.26%
DHT
DHT Holdings
10.20
0.27
2.72%
FRO
Frontline
15.59
-5.11
-24.69%
NAT
Nordic American Tanker
2.43
-1.11
-31.36%
INSW
International Seaways
32.85
-13.20
-28.66%
Scorpio Tankers Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -19.65% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
Scorpio Tankers reported a strong financial performance with significant debt reduction and shareholder returns. However, geopolitical uncertainties and market volatility pose challenges. Operational efficiencies and strategic investments provide a positive outlook.Highlights
Strong Financial Performance
Scorpio Tankers generated $842 million in adjusted EBITDA and $513 million in adjusted net income for the full year 2024.
Debt Reduction and Liquidity
The company reduced its indebtedness by $740 million, resulting in a liquidity position of over $1.3 billion.
Shareholder Returns
Returned $419 million to shareholders through $336 million in share repurchases and $84 million in dividends.
Operational Efficiency
Completed special surveys and dry docking for fifty-four vessels, enhancing operational efficiency.
Strategic Investments
Increased stake in crude tanker company DHT, viewing it as an attractive investment.
Lowlights
Geopolitical Uncertainty
Increased uncertainty due to geopolitical developments, including recent sanctions and tariff changes.
Market Volatility
Volatile market conditions have impacted rates, with current rates being lower than the previous year.
Red Sea Bypass Challenges
Continued bypass of the Suez Canal due to geopolitical tensions in the Red Sea region.
Handy Size Fleet Constraints
Lower earnings potential for handy size vessels due to dry docking and absence from Russian markets.
Company Guidance
During the Scorpio Tankers Fourth Quarter 2024 Conference Call, the company provided comprehensive guidance on various financial and operational metrics. For the fourth quarter, Scorpio Tankers generated $105 million in adjusted EBITDA and $30 million in adjusted net income, while for the full year 2024, they achieved $842 million in adjusted EBITDA and $513 million in adjusted net income. The company significantly reduced its indebtedness by $740 million and improved its liquidity position to $1.3 billion, including $531 million in cash and $788 million in undrawn revolving capacity. Operationally, they completed special surveys and dry docking of fifty-four vessels, optimizing fleet efficiency and reducing repositioning costs. Additionally, Scorpio Tankers sold twelve older vessels, enhancing their fleet's age profile. The company returned $419 million to shareholders, split between $336 million in share repurchases and $84 million in dividends. Scorpio Tankers remains focused on maintaining financial flexibility, with low leverage and strong liquidity, and is strategically poised for future opportunities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.