According to Bank of America, the Scorpio Tankers are prepared to continue to outperform even as the US and Iran appear to be nearing the end of their war. The bank upgraded Oil Transportation to Buy. Additionally, the price target on the shares was raised to $100 from $76, a 21% increase from Wednesday’s close. The tanker shipper is poised to get a boost “on the sustainability of high rates and inventory replenishment needs even as hostilities with Iran end,” analyst Ken Hoexter said in a note on Wednesday. “We expect interest rates to decline but remain at historically high levels over the next few quarters, generating significant free cash.” Late Wednesday, Iran and the United States were about to adopt a unilateral memorandum that would begin talks on key issues between the warring nations and put them on the path to a peace deal. Since the conflict began in late February, Scorpio Tankers has booked more orders due to increased demand for ton-miles. That has led to a surge in the stock, which is up 62% this year. STNG YTD Mountain STNG year-to-date According to the analyst report, the company recorded higher bookings for its specialty vessels such as its product tankers Long Rang 2 and MR compared to Bank of America estimates. Bank of America’s call is consistent with the consensus on the street. Of the 11 analysts covering Scorpio, nine have a buy or strong buy on the stock, LSEG data shows.
