On Tuesday, Scorpio Tankers Inc . (NYSE: NYSE:STNG) saw its price target increased by Deutsche Bank from $87.00 to $89.00, while the firm upheld a Buy rating on the stock.
Scorpio Tankers reported an adjusted second-quarter 2024 earnings per share (EPS) of $3.60, slightly surpassing Deutsche Bank's projection of $3.59 and the consensus estimate of $3.56 per share.
The company has kept its quarterly cash dividend steady at $0.40 per share and has bought back approximately 1.4 million of its common shares in June and July. The average purchase price for these shares was $78.16.
In addition to these repurchases, Scorpio Tankers' Board has expanded its current securities repurchase program to $400 million, indicating an anticipation of further share buybacks in the near future, especially if the shares continue to trade below the company's estimated net asset value per share.
The decision to raise the price target is rooted in the recent share repurchase activities. Deutsche Bank's outlook for the company remains positive, citing Scorpio Tankers' efforts to reduce its cash breakeven rates. The firm also expresses confidence in the company's continued share repurchases and the expectation that product tanker rates will stay strong into 2025.
InvestingPro Insights
Scorpio Tankers Inc. (NYSE:STNG) has demonstrated a robust financial performance with a noteworthy PEG Ratio of -0.25, indicating the potential for growth relative to its earnings. The company's Gross Profit Margin stands at an impressive 75.7%, illustrating efficient operations and strong control over costs. Furthermore, Scorpio Tankers' Price / Book ratio of 1.44 suggests that the stock might be reasonably valued in relation to its net assets.
InvestingPro Tips further enrich the company's profile, highlighting that management has been proactive in aggressively buying back shares, which aligns with the recent share repurchase activities noted by Deutsche Bank. Additionally, the company has maintained dividend payments for 12 consecutive years, reinforcing its commitment to returning value to shareholders. These factors, coupled with the company's ability to sustain profitability and the analysts' prediction of continued profitability this year, underpin the positive sentiment reflected in Deutsche Bank's raised price target.
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