Frontline Plc: capturing value amid energy transition and supply chain disruptions

Abstract

This work presents a comprehensive equity valuation and investment thesis for Frontline Plc within a crude tanker market influenced by global energy transition and persistent supply chain disruptions. Integrating a bottom-up revenue forecasting methodology, we draw on industry analyses (encompassing fleet aging trends, constrained shipyard capacity, evolving oil supply-demand dynamics, and geopolitical complexities) to project Frontline’s performance through 2035. Employing both Discounted Cash Flow (DCF) and Net Asset Value (NAV) approaches, testing findings using sensitivity, Monte Carlo and scenario analyses, we derive a December 2025 price target of $19.07, implying a substantial upside from current trading levels. Our findings suggest Frontline’s modern fleet composition, strategic spot market focus, and disciplined capital structure position the company favorably to capitalize on anticipated long-haul crude trades and limited fleet growth, even as macroeconomic headwinds, litigation risks, and geopolitical uncertainties persist. The company’s high dividend payout policy, yielding a projected total shareholder return of 42.5% by 2025, further enhances its investment appeal. Concluding with a confident “BUY” recommendation, this work underscores Frontline’s capacity to deliver sustained shareholder value amid ongoing industry restructuring and future decarbonization efforts.