Bank of America Lowers Scorpio Tankers Rating to Neutral
July 26, 2023
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In a recent Defense World report, Bank of America has downgraded Scorpio Tankers ($NYSE:STNG)’ rating to Neutral. Scorpio Tankers is a publicly-traded shipping company, headquartered in Monaco. The company owns and operates a fleet of crude oil, refined oil, and chemical tankers that transport products from international locations. The company’s stock has dropped drastically due to the global market downturn, and Bank of America notes that there are still risks and uncertainties associated with the shipping industry. The downgrade to Neutral from Buy may be seen as a sign of caution from Bank of America as the shipping industry continues to face difficulties.
However, Scorpio Tankers is still a viable option for investors who are willing to take the risk due to their global presence and high quality services. Despite the current market conditions, the company is well-positioned to benefit from any rebound in demand that may occur in the near future.
Market Price
This rating change was seen as a negative sign by most investors as it suggests that Bank of America is not expecting a major growth in the near future for Scorpio Tankers. Thus, despite the slight increase in the stock price, most analysts see this rating change as a sign that the stock may be under pressure in the near future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Scorpio Tankers. More…
| Total Revenues | Net Income | Net Margin |
| 1.77k | 914.94 | 51.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Scorpio Tankers. More…
| Operations | Investing | Financing |
| 1.04k | 352.54 | -1.02k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Scorpio Tankers. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.69k | 2.14k | 42.63 |
Key Ratios Snapshot
Some of the financial key ratios for Scorpio Tankers are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 32.5% | 87.5% | 60.5% |
| FCF Margin | ROE | ROA |
| 57.0% | 26.5% | 14.3% |
Analysis
At GoodWhale, we analyse the financials of SCORPIO TANKERS in order to determine its performance. We have used our Star Chart to assess the company’s financials, which reveals that SCORPIO TANKERS is strong in dividend, growth, and medium in asset and profitability. This classification places SCORPIO TANKERS in the ‘cheetah’ category, which indicates that the company is likely to achieve high revenue or earnings growth but may be considered less stable due to lower profitability. Investors who are interested in such a company may be those who are looking for higher returns from growth but who are also willing to take on more risk. In terms of health, SCORPIO TANKERS has a high health score of 8/10 with regard to its cashflows and debt, suggesting that the company is capable to safely ride out any crisis without the risk of bankruptcy. More…
Peers
Scorpio Tankers Inc is one of the largest tanker shipping companies in the world. Founded in 2009, the company is headquartered in Monaco. Scorpio Tankers Inc has a fleet of over 100 tankers and operates in over 30 countries. The company’s main competitors are TORM PLC, Petro Times JSC, and Pilipinas Shell Petroleum Corp.
– TORM PLC ($LTS:0RG4)
In 2022, Dorman Products, Inc. had a market capitalization of $16.22 billion and a return on equity of 17.86%. Dorman Products, Inc. is a leading supplier of original equipment dealer “exclusive” automotive and heavy duty replacement parts, automotive hardware, brake parts, and fasteners to the automotive aftermarket.
– Petro Times JSC ($HNX:PPT)
Pilipinas Shell Petroleum Corporation is a publicly listed company in the Philippines with a market capitalization of 28.95 billion as of 2022. The company is engaged in the business of refining, marketing, and distributing petroleum products in the Philippines. The company has a return on equity of 17.04%.
Summary
Scorpio Tankers Inc. (NYSE: STNG) has recently seen its rating lowered to “Neutral” from “Buy” by Bank of America. This could suggest that investors are still confident in Scorpio Tankers’ future prospects. Analysts have cited market volatility as one of the factors that could lead to further drops in share price, but the company has a solid balance sheet with an increasing number of vessels. Additionally, the company’s strategic partnerships with other major shipping companies, such as COSCO, have allowed for an expansion of their global reach.
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