Strength Seen in Scorpio Tankers (STNG): Can Its 5.9% Jump Turn into More Strength?
Scorpio Tankers (STNG) shares ended the last trading session 5.9% higher at $49.93. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7.1% loss over the past four weeks.
The uptick is attributable to the bullishness surrounding shipping stocks. Crude tanker rates, which have been high for quite some time, are likely remain steep, at least in the near term. The favorable tanker rates have increased the daily earnings potential as can be seen from the fact that versatile Suezmax and Aframax tankers are earning more than $100,000/day. This bullish scenario is likely to aid the top-line performances of stocks like Scorpio Tankers. Efforts to upgrade its fleet are also commendable. An uptick in voyage revenues with the rise in passengers augurs well for STNG. Shares of STNG have soared in excess of 300% in a year's time.
This shipping company is expected to post quarterly earnings of $4.75 per share in its upcoming report, which represents a year-over-year change of +701.3%. Revenues are expected to be $482.4 million, up 226.2% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Scorpio Tankers, the consensus EPS estimate for the quarter has been revised 105.5% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on STNG going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Scorpio Tankers is a member of the Zacks Transportation - Shipping industry. One other stock in the same industry, Genco Shipping & Trading (GNK), finished the last trading session 1% higher at $15.01. GNK has returned 4.6% over the past month.
For Genco Shipping , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.58. This represents a change of -70.9% from what the company reported a year ago. Genco Shipping currently has a Zacks Rank of #5 (Strong Sell).
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