Frontline is "making all the right moves" after spurning the chance to acquire another four suezmaxes from Trafigura.
This is according to Cleaves head of research Joakim Hannisdahl, who has reiterated his buy rating on the stock and raised the target share price to $15 from $12.
The move reflects rising asset prices and higher pricing from earnings multiples in 2020, he said.
The analyst added that "market fundamentals are decisively moving in favour of oil tanker owners."
The John Fredriksen tanker company passed on options for four additional suezmaxes from Trafigura this week.
It had already agreed to buy 10 of the ships, however, and is now training its sights on VLCC acquisitions.
"The company states that they are positive to further M&A, but mainly within VLCCs, thus increasing speculations that Hunter or Okeanis are potential targets," said Hannisdahl.
He added that VLCC spot rates have averaged above $30,000 per day over the past month, and last week’s attack on Saudi Arabia has seen earnings surge to around $40,000.
"With the winter market right around the corner, we expect spot rates to average around $50,000 per day for the remainder of the year, with peaks towards $80,000 per day."
