Scorpio Tankers are primed to continue outperforming, even as the U.S. and Iran appear to near the end of their war, according to Bank of America. The bank upgraded the oil transport name to buy from underperform. It also raised its price target on shares to $100 from $76, implying 21% upside 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/if hostilities with Iran end,” analyst Ken Hoexter said Wednesday in a note. “We expect rates to decline, yet remain at a historically elevated level for the next few quarters, generating significant free cash.” As of late Wednesday, Iran and U.S. were closing in on a one-page memorandum that would begin discussions on key issues between the warring nations, putting them on the path to a peace agreement. Since the start of the conflict in late February, Scorpio Tankers has booked more business due to increased ton mile demand. That has boosted its stock, which is up 62% this year. STNG YTD mountain STNG year to date The firm saw higher bookings for its specialized vessels such as its Long Rang 2 and MR product tankers versus Bank of America’s estimates, per its analyst’s note. Bank of America’s call falls in line with consensus on the Street. Of the 11 analysts covering Scorpio, nine have a buy or strong buy on the stock, LSEG data shows.
