BofA Securities raised its price target on Scorpio Tankers (NYSE:STNG) to $70 from $61 while maintaining an Underperform rating. Shares rose more than 1% intra-day Monday.
The analyst increased first-quarter 2026 and full-year 2026 earnings estimates by 17% and 3%, respectively, to $2.73 and $6.35 per share, up from prior estimates of $2.33 and $6.15. The revisions followed a surge in product tanker rates after U.S.–Iran attacks disrupted vessel activity, offsetting the impact of a reduced fleet following Scorpio’s sale of three vessels.
According to Clarksons, traffic through the Strait of Hormuz dropped by more than 90% as vessels largely halted transit through the key shipping route. As a result, BofA raised its first-quarter LR2 tanker rate forecast to $47,000 per day from $43,000 per day and increased its MR tanker rate outlook to $27,700 per day from $25,700 per day.
The firm now expects Scorpio’s average fleet rate for the first quarter to rise 23% sequentially to $34,700 per day.
Despite acknowledging that short-term disruptions may persist, the analyst noted that shipping traffic through the Strait of Hormuz has historically avoided prolonged shutdowns, even during past conflicts such as the tanker wars of the 1980s.
BofA kept its Underperform rating but raised its price objective to $70, applying a 6.0x multiple to its 2026 EBITDA estimate, up from 5.25x previously. The revised valuation still sits below the midpoint of Scorpio’s five-year trading range of 4.5x to 8.5x EBITDA, reflecting concerns about rising vessel capacity, the potential removal of sanctions on Russia, and the firm’s view that current tanker rates may represent cyclical peaks.
