Frontline's second quarter performance has earned disparate reviews from analysts.
The John Fredriksen-backed tanker owner Tuesday reported $1.08m in net earnings for the three months ended 30 June, with most ship classes surpassing break-even rates ahead with the IMO 2020 emissions regulations fast approaching.
The results pushed Jefferies analyst Randy Giveans to bump up his second-half and 2020 earnings per share estimates, while Evercore's Jonathan Chappell held firm.
"We believe Frontline is well positioned to take advantage of positive market dynamics around IMO 2020 through its young, diverse, and large fleet, its bunkering fuels joint venture, its scrubber installation program, and its investment in Feen Marine Scrubbers," wrote Giveans in a post-earnings note.
He now estimates Frontline will finish 2019 with earnings per share at $0.47, up from $0.31 and $1.40 in 2020, up from $1.143.
The improved forecasts were due to higher-than-expected time charter rates, plus the 14 new Suezmax vessels acquired from Trafigura in a deal announced last week.
The company also launched a marine fuels joint venture alongside the Swiss commodities trader.
Chappell, meanwhile, said Frontline's leverage was prompting him to push back resumption of capital returns to 2020.
He held his price target at $11 and said he expected other tanker stocks to narrow the gap as the IMO 2020 upturn kicks into gear.
"[Frontline] remains the Alpha Male of the tanker space, with substantial upside to improving fundamentals and rates; however, with its industry leading financial leverage and valuation premiums we still can't get more excited than our In Line rating," Chappell wrote.
In late trading, Frontline shares were down $0.28, or 3.42%, to $7.91.
