BofA Upgrades World Fuel Services On Oil Demand, Price Recovery

World Fuel Services Corp INT is poised to benefit as volumes accelerate in the second half of 2021 and oil prices begin rising, according to BofA Securities.

The World Fuel Services Analyst: Ken Hoexter upgraded World Fuel Services from Underperform to Buy, while raising the price target from $20 to $40.

The World Fuel Services Thesis: Volumes are set to increase with a return in aviation, marine, and land-based demand, as vaccine distribution accelerates, Hoexter said.

“As a fuel reseller/forwarder, World Fuel Services is dependent on rising demand, and we see trough levels continuing to rebound into 2021,” he wrote in the note. "Additionally, the company has reduced its debt leverage to its lowest level in more than 7 years, and its lowest absolute debt level in more than a decade."

Hoexter expects World Fuel Services to aggressively repurchase shares in 2021, given that it ended the third quarter of 2020 with more than $572 million in cash.

“We expect a $400mn buyback in 2021, which could represent 10% to 15% of shares,” he added.

INT Price Action: Shares of World Fuel Services are at $34.03, up 6.71% on the day. 

(Photo: World Fuel Services)