Frontline Ltd. (FRO) Shares: Are They Risky Or Cheap?

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Frontline Ltd. (NYSE:FRO) finished Thursday with a subtraction of -$0.78 to close at $12.12, a downside of -6.05 percent. An average of 3,940,339 shares of common stock have been traded in the last five days. There was a fall of -$0.69 in the past week, and it reached a new high 16 times over the past 12 months. The last 20 days have seen an average of 3,966,400 shares traded, while the 50-day average volume stands at 3,173,122.

FRO stock has increased by 11.11% in the last month. The company shares reached their 1-month lowest point of $11.38 on 08/31/22. With the stock rallying to its 52-week high on 09/19/22, shares of the company touched a low of $6.10 and a high of $13.85 in 52 weeks. It has reached a new high 21 times so far this year and achieved 82.46% or $5.03 in price. In spite of this, the price is down -12.49% from the 52-week high.


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Valuation Metrics

Frontline Ltd. (FRO) has a trailing price-to-earnings (P/E) ratio of 41.61. The stock’s beta is 0.13. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.23, the price-to-book (PB) ratio at 1.40.

The company’s most recent quarterly dividend payment was $0.15 a share, representing a down of -70.0% from $0.50 last year. Its latest decrease dividend $0.35 reported on Thursday August 25 2022.

Financial Health

Further, the company has a long term debt to equity ratio of 1.00 and a total debt to equity ratio of 1.22 for the quarter ending June 29. Frontline Ltd.’s EBITDA margin for the year ending June 29 is 32.85%, while its operating margin for the same period stands at 9.40%. Its gross profit as reported stood at $178.38 million compared to revenue of $749.38 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Frontline Ltd.’s return on assets was 1.60%.

Earnings Surprise

For the three-month period that ended June 29, Frontline Ltd. had $2.44 million in cash and short-term investments compared to $2.13 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of -$11.15 million in the quarter, while revenues were grew 3802.96%. The analyst consensus anticipated Frontline Ltd.’s latest quarter earnings to come in at $3.09 per share, but it turned out to be $2.18, a -29.40% surprise. For the quarter, EBITDA amounted to $99.16 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Frontline Ltd. (FRO) price momentum. RSI 9-day as of the close on 22 September was 42.33%, suggesting the stock is Neutral, with historical volatility in this time frame at 63.10%.

As of today, FRO’s price is $13.07 -5.36% or -$0.69 from its 5-day moving average. FRO is currently trading +2.93% higher than its 20-day SMA and +47.26% higher than its 100-day SMA. However, the stock’s current price level is +42.58% above the SMA50 and +66.74% above the SMA200.

The stochastic %K and %D were 48.81% and 67.45%, respectively, and the average true range (ATR) was 0.72. With the 14-day stochastic at 19.95% and the average true range at 0.67, the RSI (14) stands at 48.14%. The stock has reached -0.27 on the 9-day MACD Oscillator while the 14-day reading was at -0.12.

Analyst Ratings

Jefferies upgraded Frontline Ltd. (NYSE: FRO) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a Hold.

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