H.C. Wainwright Raises Frontline's Price Target Post Merger Announcement

Frontline Ltd's FRO price target has been raised to $9 (a downside of 8%) from $8 by H.C. Wainwright analyst Magnus Fyhr. The analyst maintains a Neutral rating on the shares.
The target price raise comes after the company agreed to merge with Euronav NV EURN, a crude tanker company, to create a tanker powerhouse with a fleet of 150 tankers.
FRO plans to issue 1.45 shares for each EURN share, resulting in EURN and FRO shareholders owning 59% and 41% of the combined company, respectively.
The combined company will keep the Frontline name and be headed by Hugo De Stoop as the CEO.
The analyst believes the merger creates a tanker powerhouse.
The combined business is expected to control 69 VLCCs and 57 Suezmax oil tankers, and 20 LR2 product tankers.
Fyhr states that the merger will help consolidate FRO's presence in the large crude tanker market while keeping a footprint in the product tanker sector.
The analyst believes the combined entity will attract a wider institutional following. The market cap would be almost 4x larger than Scorpio Tankers Inc STNG at $1.2 billion and Hafnia Ltd HFIAF at $1.0 billion.
Price Action: FRO shares are trading higher by 11.34% at $9.72 and EURN higher by 9.08% at $13.09 on the last check Friday.