Download PDF

1. Company Snapshot

1.a. Company Description

Teekay Tankers Ltd.provides marine transportation services to oil industries in Bermuda and internationally.The company offers voyage and time charter services; and offshore ship-to-ship transfer services of commodities primarily crude oil and refined oil products, as well as liquid gases and various other products.


It also provides tanker commercial and technical management services.As of December 31, 2021, the company owned and leased 48 double-hull oil tankers, time-chartered in two Aframax tankers, and one LR2 tanker.Teekay Tankers Ltd.


was incorporated in 2007 and is headquartered in Hamilton, Canada.

Show Full description

1.b. Last Insights on TNK

Teekay Tankers Ltd.'s recent performance was positively driven by solid Q2 results, with adjusted net income of $48.7 million on $232.9 million in revenue. The company's growing cash position and vessel sales above book value reaffirm the discount to NAV. A strong net cash position and fleet value exceeding book value offer a wide margin of safety. Additionally, special dividends could increase from here. The company has also seen increased stake from American Century Companies Inc., which grew its position by 7.5%.

1.c. Company Highlights

2. Teekay Tankers Q2 2025 Earnings: Riding the Spot Rate Wave

Teekay Tankers delivered a solid second quarter, reporting GAAP net income of $62.6 million or $1.81 per share and adjusted net income of $48.7 million or $1.41 per share. While this might seem impressive, it's important to note that analysts had projected adjusted EPS of $1.53, leaving the actual figure of $1.21 a slight miss. This shortfall could be attributed to the company's strategic focus on fleet renewal, which often involves capital expenditures that impact short-term profitability.

Publication Date: Aug -17

📋 Highlights
  • Strong Financial Performance:: Reported GAAP net income of $62.6M ($1.81/share) and adjusted net income of $48.7M ($1.41/share) in Q2 2025.
  • High Free Cash Flow Generation:: Generated $62.8M in free cash flow from operations, supported by $712M in cash and short-term investments with zero debt.
  • Strategic Fleet Renewal:: Sold four Suezmaxes and one LR2 for $158.5M, recognizing a $46M book gain, while acquiring a modern Suezmax and 50% of a VLCC.
  • Favorable Market Outlook:: Anticipates sustained low fleet growth due to a slow order book and aging fleet, with potential tailwinds from increased oil production and geopolitical factors.
  • Capital Allocation Focus:: Prioritizes reinvestment in core segments, targeting Aframax and Suezmax acquisitions, with a free cash flow yield exceeding 4% per $5,000 rise in spot rates above breakeven.

Fleet Renewal Strategy Paying Off

Despite the earnings miss, Teekay Tankers is actively pursuing a fleet renewal strategy that focuses on modernizing its vessels and reducing exposure to older, less efficient tankers. This strategy is evident in the company's recent acquisition of a modern Suezmax tanker and its agreement to purchase the remaining 50% ownership interest in a VLCC. Furthermore, the company strategically sold four Suezmaxes and one LR2, generating significant proceeds and a substantial book gain. This proactive approach suggests a long-term focus on enhancing operational efficiency and fleet value.

Market Outlook and Growth Prospects

The company remains optimistic about the tanker market outlook, citing potential tailwinds from increasing oil production and geopolitical factors. This positive sentiment is backed by the company's expectation of continued low fleet growth due to a slow order book and an aging fleet. Teekay Tankers projects a balanced fleet supply outlook, which should support healthy spot rates and strong cash flow generation.

Valuation Metrics: A Bargain Hunter's Paradise?

Looking at valuation metrics, Teekay Tankers appears relatively undervalued. The company boasts a P/E ratio of 5.28, a P/B ratio of 0.83, and a Free Cash Flow Yield of 12.9%. These figures suggest that investors are not fully pricing in the company's strong cash flow generation potential and its strategic positioning within the tanker market.

3. NewsRoom

Card image cap

Teekay Tankers Ltd. $TNK Shares Bought by Franklin Resources Inc.

Dec -02

Source: defenseworld.net

Card image cap

Geode Capital Management LLC Has $15.09 Million Holdings in Teekay Tankers Ltd. $TNK

Dec -02

Source: defenseworld.net

Card image cap

American Century Companies Inc. Increases Stock Position in Teekay Tankers Ltd. $TNK

Nov -29

Source: defenseworld.net

Card image cap

Teekay Tankers Ltd. $TNK Shares Sold by Acadian Asset Management LLC

Nov -14

Source: defenseworld.net

Card image cap

Teekay Tankers Ltd. $TNK Shares Purchased by Y Intercept Hong Kong Ltd

Nov -04

Source: defenseworld.net

Card image cap

Teekay Corporation Ltd. Third Quarter 2025 Update

Oct -29

Source: globenewswire.com

Card image cap

Teekay Tankers Ltd. Reports Third Quarter 2025 Results and Declares Dividend

Oct -29

Source: globenewswire.com

Card image cap

Teekay Tankers: Vessel Sales Confirm NAV Discount

Oct -22

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.82%)

6. Segments

Voyage Charter - Suezmax

Expected Growth: 4.83%

Teekay Tankers' Suezmax Voyage Charter growth of 4.83% is driven by increasing global oil demand, rising crude oil production, and a growing need for maritime transportation. Additionally, the company's strategic fleet management, cost-cutting initiatives, and strong relationships with oil majors contribute to its growth momentum.

Voyage Charter - Alframax / Long Range 2

Expected Growth: 4.83%

Teekay Tankers' Voyage Charter - Alframax / Long Range 2 growth of 4.83% is driven by increasing global oil demand, rising crude oil prices, and a growing need for mid-size tanker vessels. Additionally, the company's strategic fleet management, cost-cutting initiatives, and strong relationships with oil majors contribute to its growth momentum.

Full Service Lightering

Expected Growth: 4.65%

Teekay Tankers Ltd.'s Full Service Lightering growth of 4.65% is driven by increasing global oil demand, rising U.S. crude oil exports, and growing demand for lightering services in the Gulf of Mexico. Additionally, the company's strategic fleet expansion and operational efficiency improvements contribute to the growth.

Time-charter - Alframax / Long Range 2

Expected Growth: 4.83%

Teekay Tankers' 4.83% growth in Time-charter Alframax/LR2 segment driven by increasing global oil demand, rising crude oil prices, and limited vessel supply. Strong tanker market fundamentals, including high fleet utilization and low orderbook, support rate growth. Additionally, Teekay's diversified customer base and cost-saving initiatives contribute to the segment's growth.

Time-charter - Suezmax

Expected Growth: 4.85%

Teekay Tankers' Suezmax time-charter growth of 4.85% is driven by increasing global oil demand, rising crude oil production, and a growing need for mid-size tanker capacity. Additionally, the company's strong operational performance, cost savings initiatives, and a favorable tanker market supply and demand balance contribute to this growth.

Ship-to-Ship Support Services

Expected Growth: 4.65%

Teekay Tankers' Ship-to-Ship Support Services growth is driven by increasing demand for offshore oil and gas production, rising crude oil prices, and a growing need for efficient cargo transfer operations. Additionally, the company's strategic partnerships, modern fleet, and operational expertise contribute to its market share expansion.

Vessel Management

Expected Growth: 4.65%

Teekay Tankers Ltd.'s Vessel Management segment growth of 4.65% is driven by increasing demand for oil transportation, strategic fleet expansion, and cost-saving initiatives. Additionally, the company's focus on operational efficiency, strong customer relationships, and a favorable tanker market also contribute to this growth.

7. Detailed Products

Crude Oil Transportation

Teekay Tankers Ltd. provides crude oil transportation services, offering a range of vessels to transport crude oil from production areas to refineries and terminals.

Refined Product Transportation

The company offers transportation services for refined petroleum products, such as gasoline, diesel, and jet fuel, from refineries to distribution terminals.

LNG Transportation

Teekay Tankers Ltd. provides liquefied natural gas (LNG) transportation services, utilizing specialized vessels to transport LNG from production areas to regasification terminals.

Ship Management Services

The company offers ship management services, including technical management, crew management, and commercial management, to vessel owners and operators.

Vessel Chartering

Teekay Tankers Ltd. offers vessel chartering services, providing access to a range of vessels for short-term or long-term charter.

8. Teekay Tankers Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Teekay Tankers Ltd. operates in a niche market with limited substitutes, but the increasing adoption of alternative energy sources and environmental concerns may pose a moderate threat.

Bargaining Power Of Customers

Teekay Tankers Ltd. has a diverse customer base, and no single customer has significant bargaining power, reducing the threat of customer bargaining power.

Bargaining Power Of Suppliers

Teekay Tankers Ltd. relies on a few major suppliers for its operations, giving them some bargaining power, but the company's scale and diversification mitigate this threat.

Threat Of New Entrants

The tanker industry has significant barriers to entry, including high capital costs and regulatory hurdles, making it difficult for new entrants to join the market.

Intensity Of Rivalry

The tanker industry is highly competitive, with many established players, leading to intense rivalry and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 12.40%
Debt Cost 3.95%
Equity Weight 87.60%
Equity Cost 2.61%
WACC 2.77%
Leverage 14.15%

11. Quality Control: Teekay Tankers Ltd. passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Teekay Tankers

A-Score: 6.9/10

Value: 7.3

Growth: 8.2

Quality: 7.5

Yield: 7.0

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
International Seaways

A-Score: 6.7/10

Value: 7.2

Growth: 8.2

Quality: 7.4

Yield: 10.0

Momentum: 2.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Topaz Energy

A-Score: 6.7/10

Value: 3.4

Growth: 8.1

Quality: 6.5

Yield: 9.0

Momentum: 3.5

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Plains GP Holdings

A-Score: 6.6/10

Value: 8.1

Growth: 3.6

Quality: 3.9

Yield: 10.0

Momentum: 4.5

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Plains All American Pipeline

A-Score: 6.5/10

Value: 7.8

Growth: 3.6

Quality: 4.5

Yield: 10.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Frontline

A-Score: 5.6/10

Value: 4.9

Growth: 8.8

Quality: 5.3

Yield: 9.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

55.63$

Current Price

55.63$

Potential

-0.00%

Expected Cash-Flows