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On Thursday, leading crude oil tanker operator Frontline (NYSE:) had its stock rating upgraded from “hold” to “buy” by global investment banking firm Jefferies. Along with the rating change, Frontline's price target was also significantly raised from the previous target of $22.00 to $30.00.
The upgrade comes as Jefferies analysts recognize Frontline's status as one of the largest crude oil tanker operators with a relatively young fleet and significant scrubber fleet. . The analyst expects stronger market trends for tanker operators due to increased non-OPEC production and the potential for increased OPEC+ exports.
Frontline's commitment to shareholder returns is also highlighted, with dividends expected to continue to be a key element of the company's investor appeal. The company's unofficial policy of distributing 80% of quarterly profits as dividends is seen as a potential benefit to shareholders.
Analyst outlooks reflect a positive view of the sector's outlook, suggesting that Frontline is well-positioned to take advantage of these emerging trends in global oil markets. With increased production and potential growth in exports, tanker operators like Frontline are likely to see increased demand for their services.
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