Torm plc Downgraded to Hold from Buy by Pareto Securities

Pareto downgraded Torm plc to Hold from Buy with a DKK 21 price target due to valuation, citing the stock's strong performance.

Pareto Securities has downgraded its recommendation on Torm plc from "buy" to "hold," while setting a price target of DKK 21. The decision comes after Torm's stock surged ~15% last week following its Q2 results and strong bookings in Q3. Torm, an oil products tanker owner, saw its shares fall by 1.5% on Tuesday following the downgrade.

The downgrade is attributed to valuation concerns, despite Torm delivering well in Q2 and raising guidance. Pareto analyst Eirik Haavaldsen noted that while the company's Q3 bookings are solid, the 73% dividend payout ratio is a drawback. Haavaldsen also raised his estimate for Torm's FY 2025 EBITDA to $505M but expects more downside to estimates for FY 2026, being 35% below consensus on earnings per share.

The geopolitical events continue to dictate sentiment for tankers, with product tankers benefiting the most from the rerouting of Russian volumes. Despite the challenges, Torm remains optimistic about its future prospects.

References:
[1] https://www.marketscreener.com/news/pareto-securities-downgrades-torm-to-hold-buy-sets-price-target-at-135-danish-kroner-ce7c51dcd18ff625
[2] https://seekingalpha.com/news/4487167-torm-turns-lower-as-pareto-downgrades-after-stock-gains-from-strong-q2