Evercore ISI has significantly raised its revenue forecasts for tankers while warning of the proximity to peak revenues. In a report published yesterday, Jonathan Chappell from Evercore raised the daily revenue forecast for very large crude carriers (VLCCs) in 2027 from $57,500 to $115,000 and increased the 2026 forecast by 97% to $215,000.
Extraordinary Revenue Forecast
The bank now forecasts that daily revenues for VLCCs will average $476,000 in the fourth quarter before rates gradually decline from 2027. However, Chappell has cautioned against buying tanker stocks, warning that the market is influenced by unusual geopolitical disruptions rather than typical supply and demand fundamentals.
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Market Developments and Challenges
Seven tanker companies covered by Evercore have seen growth between 72% and 154% this year, significantly outperforming the public stock market. Chappell believes that tanker stocks have somewhat become conditional bets on continued instability in the Middle East, as their direction is increasingly influenced by geopolitical headlines. Evercore raised its price target for Frontline from $41 to $53 but maintained its rating at neutral, which is significantly lower than BTIG's $70 target.
Evercore also raised its target for DHT from $19 to $26 and set a target of $7 for Nordic American Tankers while still recommending a performance downgrade. The bank assigns relative value to product tanker owners, including Scorpio Tankers, Torm, and Ardmore Shipping, who are less exposed to the eventual normalization of tanker revenues and asset prices.
Meanwhile, other Wall Street analysts are more optimistic about the duration of peak revenues. BTIG continues to support tanker stocks, believing that declining oil inventories and prolonged disruptions could sustain extraordinary revenues.
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