OB:FRO

Stock Analysis Report

Executive Summary

Frontline Ltd., a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide.


Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has Frontline's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FRO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-9.5%

FRO

-6.0%

NO Oil and Gas

-5.1%

NO Market


1 Year Return

32.5%

FRO

-22.0%

NO Oil and Gas

-5.6%

NO Market

Return vs Industry: FRO exceeded the Norwegian Oil and Gas industry which returned -22.3% over the past year.

Return vs Market: FRO exceeded the Norwegian Market which returned -5.1% over the past year.


Shareholder returns

FROIndustryMarket
7 Day-9.5%-6.0%-5.1%
30 Day-25.8%-14.4%-5.3%
90 Day-32.4%-12.9%-3.2%
1 Year33.6%32.5%-17.4%-22.0%-0.7%-5.6%
3 Year26.6%19.4%19.9%4.9%25.1%9.4%
5 Year-14.3%-29.5%34.0%7.5%52.3%18.3%

Price Volatility Vs. Market

How volatile is Frontline's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Frontline undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FRO (NOK70.15) is trading below our estimate of fair value (NOK150.67)

Significantly Below Fair Value: FRO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FRO is poor value based on its PE Ratio (21.6x) compared to the Oil and Gas industry average (15.9x).

PE vs Market: FRO is poor value based on its PE Ratio (21.6x) compared to the Norwegian market (14.5x).


Price to Earnings Growth Ratio

PEG Ratio: FRO is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: FRO is overvalued based on its PB Ratio (1x) compared to the NO Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Frontline forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

28.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FRO's forecast earnings growth (28.4% per year) is above the savings rate (0.7%).

Earnings vs Market: FRO's earnings (28.4% per year) are forecast to grow faster than the Norwegian market (18.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FRO's revenue (7% per year) is forecast to grow faster than the Norwegian market (3.4% per year).

High Growth Revenue: FRO's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FRO's Return on Equity is forecast to be low in 3 years time (11.4%).


Next Steps

Past Performance

How has Frontline performed over the past 5 years?

-49.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FRO has high quality earnings.

Growing Profit Margin: FRO became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: FRO's earnings have declined by -49% per year over the past 5 years.

Accelerating Growth: FRO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: FRO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-18%).


Return on Equity

High ROE: FRO's Return on Equity (4.1%) is considered low.


Next Steps

Financial Health

How is Frontline's financial position?


Financial Position Analysis

Short Term Liabilities: FRO's short term assets ($317.0M) do not cover its short term liabilities ($525.8M).

Long Term Liabilities: FRO's short term assets ($317.0M) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: FRO's debt to equity ratio (124.9%) is considered high.

Reducing Debt: FRO's debt to equity ratio has increased from 50.6% to 124.9% over the past 5 years.

Debt Coverage: FRO's debt is not well covered by operating cash flow (12%).

Interest Coverage: FRO's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet

Inventory Level: FRO has a high level of physical assets or inventory.

Debt Coverage by Assets: FRO's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Frontline's current dividend yield, its reliability and sustainability?

5.59%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FRO's dividend (5.59%) is higher than the bottom 25% of dividend payers in the Norwegian market (3%).

High Dividend: FRO's dividend (5.59%) is low compared to the top 25% of dividend payers in the Norwegian market (6.42%).


Stability and Growth of Payments

Stable Dividend: FRO has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: FRO has only been paying a dividend for 4 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.2%), FRO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FRO's dividends in 3 years are forecast to be covered by earnings (62.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.1yrs

Average management tenure


CEO

John Fredriksen (75yo)

22.3yrs

Tenure

Mr. John Fredriksen has served as the Chairman of the Board, President and Director of Frontline Ltd. since November 3, 1997 and served as its Chief Executive Officer. Mr. Fredriksen is a Founder of World  ...


Leadership Team

NamePositionTenureCompensationOwnership
John Fredriksen
Chairman of the Board & President22.3yrsno datano data
Inger Klemp
Principal Financial Officer8.1yrsno data0.091% $12.1m
Robert Macleod
Chief Executive Officer of Frontline Management AS5.3yrsno data0.51% $67.1m

8.1yrs

Average Tenure

55yo

Average Age

Experienced Management: FRO's management team is seasoned and experienced (8.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Fredriksen
Chairman of the Board & President22.3yrsno datano data
Ola Lorentzon
Independent Director4.8yrsno data0.0015% $201.7k
James O'Shaughnessy
Independent Director1.4yrsno datano data
Ulrika Laurin
Independent Director1.4yrsno data0.025% $3.4m

3.1yrs

Average Tenure

62.5yo

Average Age

Experienced Board: FRO's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FRO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Frontline Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Frontline Ltd.
  • Ticker: FRO
  • Exchange: OB
  • Founded:
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: US$1.415b
  • Listing Market Cap: US$13.268b
  • Shares outstanding: 197.69m
  • Website: https://www.frontline.bm

Number of Employees


Location

  • Frontline Ltd.
  • Par-la-Ville Place
  • 14 Par-la-Ville Road
  • Hamilton
  • HM 08
  • Bermuda

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FRONYSE (New York Stock Exchange)YesOrdinary SharesUSUSDMay 1998
FROOB (Oslo Bors)YesOrdinary SharesNONOKMay 1998
FRLNDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 1998
FRO1 NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNMay 1998
FROOBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBNOKMay 1998
0REHLSE (London Stock Exchange)YesOrdinary SharesGBNOKMay 1998

Biography

Frontline Ltd., a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of September 30, 2019, the company operated a fleet of 71 vessels. It is also involved in the charter, purchase, and sale of vessels. The company is based in Hamilton, Bermuda. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 20:38
End of Day Share Price2020/02/26 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.