SeatradeMaritime: Torm share price prospects – ‘smoking hot’

Analysts are upbeat on the prospects for Torm and the product tanker sector following the company’s Q2 earnings report.

Investors in shipping shares showed their enthusiasm following the Q2 earnings report by Torm plc (NYSE: TRMD), which moved smartly ahead on a day of generally flat overall equity markets.

Among online “Fintweeters” on social media, one Norway-based analyst remarked, as the Q2 report was released, that: “figures out just before open. And they are looking smoking hot”. As has been the case with other reports from the products sector, the newfound zeal regarding company prospects has come from reports of bookings in Q3, where hires on fixtures are exceeding those from the previous quarter-Q2. The analyst told his Twitter followers that: “Q2 came in in line, but applying moderate estimates for open days and we are looking at solid Q3 beats. Applying the same for open as it currently locked in we see massive beat.”

In its report, the shipping company said: “As of 08 August 2025, Torm had covered 56% of the Q3 2025 earning days at an average rate of US $30,617/day. By vessel class, coverage stood at 63% for LR2s at $36,670/day, 54% for LR1s at $29,285/day and 54% for MRs [which compose the majority of TRMD’s fleet], at $28,436/day.”

These figures compare very favourably with the now reported TCEs for Q2, with LR2’s at $35,459 per day, LR1’s at $27,371 per day and MR’s at $23,345 per day, some $5,000 per day below the Q3 bookings so far mentioned above.

The veteran Evercore ISI analyst Jon Chappell, in a message to clients, said: “TRMD posted 2Q25 adjusted diluted EPS of $0.53 (excluding a gain on asset sale), coming in slightly below our forecast of $0.58. However, the 3Q-to-date spot rates across its 3 asset classes are all tracking well above expectations, resulting in a large upward revision to 3Q25 estimates, with ours moving up to $0.81 (from $0.36).”

Evercore ISI has put a target price of $23 on the shares, trading at around $20 following the Q2 report. Prices had touched $14 per share in early April, before moving into the present upward trend.

At Jefferies, analyst Omar Nota, which has also put a $23 target on share pricing, and suggested that TRMD shares will likely see “higher sequential 3Q result and likely upwards revisions to consensus estimates, which is consistent with other product companies that have reported results this earnings season (STNG and ASC)”.

He also discussed differences between the product and crude sectors- noting that: “This compares to crude tankers which have thus far seen revisions lower for 3Q as a result of softer rates. Both sectors look set for much stronger results in 4Q on higher OPEC+ volumes. However, thus far in 2025 the equity markets have favored crude tankers while products have lagged, despite the fact that companies in both segments have reported matching EBIT margins during 1H25 and so far spot rates suggest product margins will outpace crude during 3Q. Given product equities remain down 5% year-to-date while crude equities have risen 25%… we see a catch-up trade in the coming months.”

TRMD, in its market outlook presented to investors, said: “At the beginning of the third quarter, clean petroleum product trade volumes surged to the levels last seen in early 2024. This was mainly driven by increased exports from the Middle East, where widening East-West diesel arbitrage resulted in increased loadings towards Europe. Additionally, product exports from China increased significantly, while flows from the Americas kept their strength.” Unpredictable political developments across geographies are always a factor when the subject turns to tanker shares. Investors have not forgotten the sector’s boom in mid-2024 (prompted by lengthening voyage patterns) when the TRMD shares reached as high as $38 per share.

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