Scorpio Tankers Inc. Common Shares (STNG)

FairStock Score: 79/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with the business. Scorpio Tankers moves refined petroleum products and crude oil with 90 wholly owned tankers—34 LR2, 42 MR, and 14 Handymax. Shipping is a commodity industry; rates are set by global supply and demand, so I do not see a wide moat. However, scale and a modern fleet may help it earn decent returns through cycles. The latest quarterly filing for fiscal Q2 2026 showed revenue of $408.7 million and net income of $387.5 million, an extraordinary 94.81% margin. That kind of margin is unlikely to persist forever in a cyclical business, so I treat it as a peak-like signal rather than steady-state earnings power. Still, the balance sheet looks conservative: debt-to-equity is 0.20, Altman Z-score is 3.67, and trailing free cash flow is $655.3 million, a 17.2% free-cash-flow yield at the 2026-10-13 close. Valuation is undemanding. At $88.75, the FairStock-calculated P/E is 5.53, P/B is 1.11, EV/EBITDA is 2.56, and the Graham Number is $162.00, implying a 45.22% margin of safety. The Piotroski F-score of 6/9 is decent but not flawless. Return on equity is 24.62%, while return on capital employed is only 8.24%, which tells me the business is highly profitable on equity but not necessarily on total capital. Growth has been explosive per the supplied figures, but in tankers, today’s high rates can sow tomorrow’s fleet supply. I would want a price that compensates for that cycle, and the numbers here at least offer an unusual margin of safety if earnings normalize only modestly lower.

In plain English: Scorpio Tankers owns and operates tanker ships that carry oil and refined fuels around the world. The business looks very profitable right now, with high recent earnings, low debt, and strong cash generation, though shipping profits can rise and fall with oil-market cycles. Based on the company’s profits and asset value, the shares look inexpensive, but the price depends heavily on future shipping rates.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer