One-glance verdict
Undervalued
$56.42 our estimate vs market $53.67
Wall Street consensus: $47.00 (-16.7% lower than our fair-value estimate)
5% below our estimate, below the bear case
Fundamentals snapshot
Frontline plc
FRO · NYQ · Energy · Oil & Gas Midstream
Current price
$53.67
52-week range
$20.47 - $54.69
Market cap
$11.95B
Balance sheet
Stretched
2.57x Stretched
Net debt $2.11B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 53.9% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 2/10 years.
- Risk Forward P/E (11.8x) is higher than trailing (7.7x) - earnings are expected to drop.
- Risk Net debt grew 47.9% over 3 years.
What this company does
Frontline plc
Frontline is a shipping company that owns a large fleet of tanker ships used to transport oil and petroleum products around the world. The company makes money primarily by chartering (renting out) its ships to oil companies and traders for specific voyages or periods. Because its business depends heavily on global oil demand and shipping rates, its financial performance is often tied to the health of the global economy.
How the company got here
Frontline's story began in 1985 and took a major turn in 1996 when Norwegian shipping magnate John Fredriksen became the largest shareholder. Through a series of acquisitions and mergers, including with London and Overseas Freighters, ICB, and Golden Ocean, Fredriksen transformed the company into the world's largest oil tanker company. This growth allowed Frontline to list on the New York Stock Exchange in 2001. A key part of its history involves spinning off other successful companies, like Ship Finance International and Golden Ocean Group, to its shareholders. More recently, the company has focused on modernizing its fleet, for instance by acquiring 24 large tankers in a major deal.
What it actually does
Think of Frontline as a global taxi service for oil. The company doesn't own the oil or sell gasoline; it owns and operates a large fleet of tanker ships that transport crude oil and refined petroleum products from where they are produced to where they are needed around the world. Its customers are major oil companies, trading houses, and refineries who pay Frontline to move their products across the ocean. The company makes money based on shipping rates, which can change depending on the demand for oil transportation, fuel costs, and the number of available ships.
Very Large Crude Carriers (VLCCs)
This is the largest class of ships in Frontline's fleet, designed to carry massive quantities of crude oil, often on long-distance routes like from the Middle East to Asia. These ships are the workhorses of the global oil trade, and their earnings represent a significant portion of Frontline's business, making up roughly half of its revenue. Customers, typically large oil producers and refiners, pay to charter (rent) these vessels for specific journeys or for a set period. The sheer size of VLCCs makes them a cost-effective way to transport oil across the globe.
Suezmax Tankers
Suezmax tankers are the second-largest ships in Frontline's fleet. Their name comes from the fact that they are the largest size of ship that can travel through the Suez Canal fully loaded. This makes them very flexible for carrying crude oil to a wide variety of ports around the world that are not equipped to handle the larger VLCCs. This segment provides a substantial, though smaller, portion of the company's income compared to the VLCCs.
LR2/Aframax Tankers
This segment consists of smaller, more versatile tankers. Unlike the larger ships that mostly carry crude oil, LR2/Aframax tankers often transport refined products like gasoline, diesel, and jet fuel. Their smaller size allows them to access a wider range of ports, making them suitable for shorter, regional trade routes. This part of the business provides diversification for Frontline, allowing it to serve different parts of the oil and gas market.
What management is betting on now
Frontline's current strategy is heavily focused on fleet renewal, which means selling older ships and buying new, more fuel-efficient ones. This helps reduce operating costs and ensures the fleet meets modern environmental standards, which can make the ships more attractive to customers. The company is also focused on returning value to its shareholders, often paying out a significant portion of its earnings in the form of dividends (a share of the profits distributed to investors). By maintaining a modern fleet and a strong balance sheet (a snapshot of the company's financial health), management aims to be well-positioned to profit from strong tanker market conditions.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$749.38M
Net income
$-11.15M
Diluted EPS
-0.06
Operating cash flow
$62.93M
Free cash flow
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Sources
Revenue
$1.22B
Net income
$412.88M
Diluted EPS
2.09
Operating cash flow
$604.06M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $56.42 vs current price $53.67
Wall Street consensus is the average analyst price target: $47.00 (-16.7% lower than our fair-value estimate).
Our most-likely fair value is $56.42 a share — about 5.1% above today's price of $53.67, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $2.1B. Interest coverage 2.6x.
Net debt
$2.11B
Interest coverage
2.57x
Frontline plc's profit covers its interest bill about 2.6 times over.
Stretched
Worse cushion
Baseline
Better cushion
FRO
BASELINE
Frontline plc
Total debt $2.43B Interest coverage 2.57x This is the baseline the peer rows are being compared against.
Total debt $652.77M Interest coverage 7.17x +180% vs FRO Carries about 2.8x more debt cushion than FRO.
Total debt $441.86M Interest coverage 12.14x +373% vs FRO Carries about 4.7x more debt cushion than FRO.
Total debt $37.50M Interest coverage 74.24x +2,794% vs FRO Carries about 28.9x more debt cushion than FRO.
Total debt $406.57M Interest coverage 1.35x -47% vs FRO Carries about 1.9x less debt cushion than FRO.
What you should know
The case for and against FRO
3 Rewards
2 Risks
Rewards
-
Returns 53.9% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 2/10 years.
-
Dividend yield is 10.4% with 26-year payout history.
Risks
-
Forward P/E (11.8x) is higher than trailing (7.7x) - earnings are expected to drop.
-
Net debt grew 47.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
7.73x
Forward P/E
11.80x
P/B
3.79x
P/S
4.40x
EV/EBITDA
8.66x
PEG ratio
5.58x
Profitability
How much profit each dollar creates
Gross margin
63.0%
Operating margin
63.2%
Net margin
54.8%
ROE
53.9%
ROA
14.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.77x
Current ratio
1.87x
Quick ratio
0.66x
Total debt
$2.43B
Total cash
$322.31M
Growth
How the business has been compounding
Revenue TTM
$3.67B
Revenue 5Y CAGR
3.8%
EPS TTM
6.94
EPS 5Y CAGR
-8.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$993.35M
Free CF TTM
$669.93M
FCF margin
18.3%
Dividend
Shareholder payout
Yield
10.4%
Payout ratio
46.9%
Last ex-div date
2026-09-18