What Happened?

Shares of tanking company Scorpio Tankers (NYSE: STNG) jumped 8.6% in the morning session after it received positive attention from Wall Street, including a price target increase from Jefferies and an upgrade from BofA Securities. 

Jefferies raised its price target on the stock to $70 from $65, maintaining a Buy rating and citing rising product tanker rates as a key factor. The firm noted that Scorpio Tankers is a "prime beneficiary" of this trend. 

Adding to the bullish sentiment, BofA Securities upgraded the stock to Buy from Neutral, setting a price target of $60. The positive news was further supported by a company announcement that it secured a five-year charter for one of its LR2 product carriers at a rate of $28,350 per day, locking in a steady income stream. These developments highlight strong financial health and growing confidence in the company's market position.

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What Is The Market Telling Us

Scorpio Tankers’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 3 days ago when the stock gained 1.8% on the news that the company announced a significant five-year time charter-out agreement for one of its product tankers and provided an update on its daily charter rates for the third quarter of 2025. 

Scorpio Tankers secured a five-year contract for its 2014-built LR2 tanker, the STI Orchard, at a rate of $28,350 per day. This long-term agreement provides stable and predictable revenue for the company. 

Additionally, Scorpio Tankers reported strong current Time Charter Equivalent (TCE) rates for the third quarter. Its LR2 vessels are earning an average of $32,700 per day in the spot market, with MR tankers at $23,500 per day. High fleet utilization, with over 85% of revenue days booked for its LR2 and MR fleets, further underscores the robust market conditions. This combination of a long-term charter and strong spot rates signals healthy demand and profitability, boosting investor confidence.

Scorpio Tankers is up 15.4% since the beginning of the year, but at $57.74 per share, it is still trading 22.3% below its 52-week high of $74.31 from October 2024. Investors who bought $1,000 worth of Scorpio Tankers’s shares 5 years ago would now be looking at an investment worth $4,483.

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