Freedom Broker issues short-term trade idea to buy stock of oil shipper Frontline

Freedom Broker now sees about 15% near-term upside in shares of Frontline, arguing that investors are underestimating the pace at which geopolitical tensions are tightening the crude shipping market.

On a two-month investment horizon, shares of Cyprus-based Frontline, which has a market capitalization of $7.9 billion on the New York Stock Exchange, could gain about 15%, according to a Freedom Broker note seen by Oninvest. The market has yet to fully price in the disruption to oil logistics caused by the Iran crisis, the analysts say. This is creating a gap between nominal and effective fleet supply: formally, there are enough vessels, but in practice this is not the case, Freedom Broker says.

The reason is longer routes: each additional day at sea effectively removes part of the fleet from availability. This leads to a supply-demand imbalance and drives higher freight rates.

In container shipping, which is largely contract-based, the short-term impact may be more muted, the analysts say. By contrast, the tanker market is spot-driven, meaning that higher freight rates are reflected “almost immediately” in companies’ financial results and lead to stronger cash flow.

Freedom Broker also notes that in a geopolitical environment, timely cargo delivery becomes critical for shippers. This reduces their sensitivity to freight costs, supports elevated rates, and increases the resilience of shipping companies’ revenues, the note says.

Since the start of the year, Frontline shares have surged 63%. Longer routes, more complex logistics, and higher freight rates are creating favorable conditions for the sector and for companies such as Frontline, Barchart wrote.

If the Strait of Hormuz remains unsafe for shipping, vessels reroute via the Cape of Good Hope, increasing voyage duration by 10-15 days, OilPrice noted. In March, it included Frontline shares among its top five stocks to buy now.

Barchart notes that tanker stocks have historically performed well in volatile environments. Frontline “Periods of volatility tend to create opportunities, and Frontline has moved decisively... as we enter what may prove to be an unprecedented period for the tanker industry.” CEO Lars Barstad said during the fourth quarter 2025 earnings call. However, OilPrice warns that tanker freight rates are cyclical, and a diplomatic breakthrough could quickly reverse part of the gains.

Last week, Evercore ISI downgraded several tanker operators, including Frontline, from “buy” to “hold.” It also cut its target price for Frontline shares by more than 17%, according to Yahoo Finance data. Investor interest in tanker stocks over the last two months has been higher than at any time since April 2020, but much of the potential earnings upside is already priced in, the investment bank said, as cited by Investing.com. The market tends to fade record growth rates, particularly when they are seen as anomalous, Evercore notes.

Most of Wall Street remains bullish on Frontline stock. Nine analysts recommend “buy,” three “hold,” and one “sell.” The average target price of $39.40 per share implies nearly 11% upside versus the Friday close.