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    Assessing SFL Corporation (NYSE:SFL) Valuation After Fleet Optimization and Tanker Reinvestment Strategy

    Simply Wall St·12/21/2025 22:13:51
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    SFL (NYSE:SFL) just reshuffled a key slice of its tanker fleet, selling two 2015-built Suezmax vessels and ending charters on two newer ships to free up cash for younger, more efficient tonnage.

    See our latest analysis for SFL.

    The move comes after a choppy year for SFL, with a 1 year to date share price return of negative 25.41 percent and a softer 1 year total shareholder return of negative 10.62 percent. The 5 year total shareholder return of 99.50 percent still points to solid long term compounding and suggests recent weakness may reflect shifting risk perceptions rather than a broken story.

    If this kind of fleet reshuffle has you thinking more broadly about where the next shipping or energy linked winners might come from, it could be worth exploring fast growing stocks with high insider ownership as a way to spot companies where management has meaningful skin in the game.

    With shares still trading at a discount to analyst targets but long term returns firmly positive, the key question now is straightforward: is SFL quietly undervalued, or is the market already pricing in its next leg of growth?

    Most Popular Narrative: 17.5% Undervalued

    With SFL last closing at $7.78 versus a narrative fair value of $9.43, the story leans toward upside potential built on fleet renewal and capital discipline.

    The company's strategic fleet renewal and divestment of aging, less efficient vessels reducing average fleet age by about two years directly lowers operational costs, increases competitiveness for premium charters, and enhances the sustainability of future cash flows.

    Read the complete narrative.

    Curious how shrinking revenues could still line up with sharply higher profits and a richer earnings multiple than the wider sector? Want to see the full playbook behind that growth math and dividend firepower? Read on to uncover how those projections stack up over the next few years and what has to go right for this valuation to stick.

    Result: Fair Value of $9.43 (UNDERVALUED)

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

    However, that upside depends on execution, with container exposure and heavy capex plus environmental compliance costs all potential spoilers if markets or regulations turn.

    Find out about the key risks to this SFL narrative.

    Build Your Own SFL Narrative

    If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.

    A great starting point for your SFL 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.