Scorpio Tankers (STNG): Assessing Valuation Following Major Fleet Renewal and Expansion Moves

Scorpio Tankers (STNG) is making moves to modernize its fleet, having just announced deals for two new Very Large Crude Carriers from South Korea and additional MR tankers. These investments set the stage for fleet growth and greater efficiency.

See our latest analysis for Scorpio Tankers.

Scorpio Tankers’ wave of fleet expansion arrives as momentum builds in its share price, with a substantial 32% gain over the past 90 days and a 24% year-to-date share price return. Recent headline deals such as its new VLCC orders and vessel sales signal management’s confidence, and long-term shareholders have certainly felt rewarded with a striking 517% total return over five years.

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With shares sharply higher and a major fleet renewal underway, the key question becomes whether Scorpio Tankers’ recent gains leave more room to run, or if the market has already priced in its future growth and efficiencies.

Most Popular Narrative: 15.6% Undervalued

Scorpio Tankers' fair value, as calculated in the latest widely followed narrative, lands well above the current share price, putting the spotlight on what could be driving this valuation gap.

Structural changes in global refining, including ongoing refinery closures in Europe and North America and limited new capacity additions, are increasing the average distance and complexity of refined products trade. This is steadily raising ton-mile demand and supporting higher utilization rates for Scorpio's modern fleet. This dynamic is likely to drive revenue growth and support long-term rate strength.

Read the complete narrative.

Curious what earnings and industry shifts justify such a valuation premium? There’s a bold bet on future margins, major trade flows, and competitive fleet advantages that you won’t want to miss. The narrative reveals the crucial forecasts that set Scorpio Tankers apart. Find out what’s behind this conviction.

Result: Fair Value of $73.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, potential overcapacity from new ship deliveries or a structural decline in oil demand could quickly change Scorpio Tankers’ strong outlook.

Find out about the key risks to this Scorpio Tankers narrative.

Build Your Own Scorpio Tankers Narrative

If this perspective doesn’t quite fit your view, or you’re keen to dig into the numbers first-hand, you can craft your own narrative in just a few minutes. Do it your way

A great starting point for your Scorpio Tankers research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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