Scorpio Tankers upgraded to Buy at UBS with inflection point seen in 2018

|About: Scorpio Tankers Inc. (STNG)|By:, SA News Editor

Scorpio Tankers (STNG -1%) is upgraded to Buy from Neutral with a $5.50 price target, raised from $4.50, at UBS, which says the company could benefit from a looming supply-demand inflection point for product tankers in 2018.

UBS thinks fundamental signals are pointing in a positive direction ahead of a 2018 inflection point, as product tanker demand is expected to grow 3% and outpace supply growth of 2.8%.

The firm sees oversupply risk as very low due to shipyard capacity reductions and a substantial amount of capital and lending that has left the shipping sector, and .the inflection point driving freight rates back toward average levels.