FRO - Frontline Ltd. - analyst community has upgraded their earnings projections

Frontline Ltd. (FRO) shares have been on a nice run for the past three months, advancing from less than $35 on Jan 22 to their current location of over $55. Much of the recent price strength comes after the company's very strong fourth-quarter and full-year results, reported on Feb 14. Frontline is enjoying robust sales and strong pricing power due to the incredible surge in the energy markets.

Frontline, Ltd. engages in the ownership and operation of oil tankers and bulk carriers. The company's fleet consists of 86 ocean tankers. The company was founded in 1948, carries a market cap. of $4.08 billion, and is based in Hamilton, Bermuda.

Fourth-Quarter and Full-Year Results

Frontline reported very strong fourth-quarter and full-year results on Feb 14. Fourth-quarter income jumped more than 50% to $202.3 million. Full-year income was also up nicely as well, increasing 11% and advancing to $574.4 million. Full-year earnings were up to $7.68 per share from earnings of $6.90 per share in fiscal 2006.

Frontline noted that the day rates it charges for all three classes of its carriers increased from just the last quarter, a reflection of the demand the company is experiencing for its services. Frontline said that its VLCCs, Suezmax tankers and Suezmax OBO carriers were priced at $45,700, $33,100 and $42,400, respectively compared with $36,000, $25,000 and $41,300 respectively in the third quarter.

Frontline also noted that it currently carries a total of $819.9 million of cash and cash equivalents.

Rising Estimates

In reaction to the solid fourth-quarter and full-year results and the favorable pricing environment, the analyst community has upgraded their earnings projections. The current-quarter estimate has jumped from $1.77 per share 90 days ago to its current projection of $2.64 per share. The next-year estimate has also received significant upgrades, advancing from $2.84 90 days ago to its current projection of $4.24 per share.

Another attractive component of Frontline shares is the fat dividend that the company likes to pay. In the fourth quarter, based upon the strong results, Frontline paid a $2.00 dividend per share owned.

No only is Frontline carrying attractive growth and momentum characteristics, it also has reasonable valuations. With its next-year earnings projected at $4.24 per share, this company carries a forward P/E multiple just a pinch below 13X.

The Chart

And finally, as previously mentioned, the company's stock price has been performing. In just the last three months share of FRO have returned over 60%. On a slightly longer term basis, looking back to last June, the company's stock has broken above a downward sloping trend-line that had been pressuring its share price. With this level effectively breached, the next target is the 52-week and all-time high, just above $64. Take a look at the chart below and the nice breakout that has just recently occurred.

Content Courtesy: Zacks Investment Research

#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.

| Blog Home| VitalStocks Home