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International Seaways (INSW) stock has soared more than 100% YTD, fueled by booming tanker demand.
Sharply higher FY26 and FY27 EPS estimates suggest INSW still has significant upside potential.
INSW's attractive valuation and lofty dividend yield of more than 20% bolster its investment appeal.
Sporting a Zacks Rank #1 (Strong Buy), International Seaways (INSW - Free Report) ) appears to have more upside potential even after its stock has soared more than 100% year-to-date.
One of the world's largest publicly traded tanker operators, International Seaways transports crude oil and refined petroleum products across global markets.
Notably, its Zacks Transportation-Shipping Industry currently ranks in the top 12% of more than 240 Zacks industries, reflecting a favorable business environment for shipping companies.
International Seaways is benefiting from surging tanker charter rates, supply disruptions, and shifting global oil trade routes, which have significantly strengthened its operating performance.
In the third quarter, shipping revenue surged 146% year over year to $483 million, while adjusted earnings skyrocketed 408% to $5.84 per share. Adjusted EBITDA more than tripled to $345 million, with Q3 free cash flow jumping 269% YoY to $234 million, as illustrated by the orange line in the quarterly chart below.
Image Source: Zacks Investment Research
The momentum is reflected in sharply higher earnings expectations. Over the last 60 days, the Zacks Consensus EPS estimate for fiscal 2026 has jumped 69% from $16.09 to $27.24 per share, while the FY27 EPS estimate has skyrocketed 130% from $11.26 to $25.91 per share.
These substantial upward revisions suggest analysts expect the shipping boom to support robust profitability beyond the current year.
Astonishingly, FY26 and FY27 EPS are projected to be more than 375% above last year's earnings of $5.42 per share.
Image Source: Zacks Investment Research
INSW’s Attractive Valuation & Lofty Dividend
Despite its extraordinary rally, International Seaways may still be attracting value and income investors.
Trading near $100 a share, INSW still trades at just 6X forward earnings, a compelling valuation considering its exceptional EPS growth.
INSW still offers a slight discount to its decade-long median of 8X forward earnings and the Zacks Transportation-Shipping Industry's current average of 7X, which includes other noteworthy companies such as ZIM Integrated Shipping (ZIM - Free Report) ), Euroseas (ESEA - Free Report) ), and Scorpio Tankers (STNG - Free Report) ).
Image Source: Zacks Investment Research
Adding to its appeal is the company's generous dividend policy. International Seaways recently declared another quarterly dividend of $5.05 per share, payable December 23, with an upcoming ex-dividend date of December 9.
Annualizing that payout would imply a dividend yield exceeding 20% at current levels, although investors should recognize that INSW's substantial variable distributions depend on shipping profitability and are not guaranteed in the future.
Still, International Seaways has paid approximately $624 million in dividends over the last 12 months, with its recently declared $5.05 quarterly payout set to bring total distributions to more than $830 million across the latest four dividend declarations.
Image Source: Zacks Investment Research
Bottom Line
With its rapidly improving earnings outlook, discounted valuation, and substantial shareholder distributions, International Seaways remains an intriguing opportunity for those seeking exposure to the shipping boom.
While investors may eventually want to consider taking profits following INSW's spectacular rally, especially as unusually elevated tanker rates may normalize, the dramatic increase in earnings estimate revisions suggests the stock could still have more room to run.
View the Zacks #1 Rank List
Bull of the Day: International Seaways (INSW)
Key Takeaways
Sporting a Zacks Rank #1 (Strong Buy), International Seaways (INSW - Free Report) ) appears to have more upside potential even after its stock has soared more than 100% year-to-date.
One of the world's largest publicly traded tanker operators, International Seaways transports crude oil and refined petroleum products across global markets.
Notably, its Zacks Transportation-Shipping Industry currently ranks in the top 12% of more than 240 Zacks industries, reflecting a favorable business environment for shipping companies.
Image Source: Zacks Investment Research
INSW’s Strong Fundamentals & Surging EPS Estimates
International Seaways is benefiting from surging tanker charter rates, supply disruptions, and shifting global oil trade routes, which have significantly strengthened its operating performance.
In the third quarter, shipping revenue surged 146% year over year to $483 million, while adjusted earnings skyrocketed 408% to $5.84 per share. Adjusted EBITDA more than tripled to $345 million, with Q3 free cash flow jumping 269% YoY to $234 million, as illustrated by the orange line in the quarterly chart below.
Image Source: Zacks Investment Research
The momentum is reflected in sharply higher earnings expectations. Over the last 60 days, the Zacks Consensus EPS estimate for fiscal 2026 has jumped 69% from $16.09 to $27.24 per share, while the FY27 EPS estimate has skyrocketed 130% from $11.26 to $25.91 per share.
These substantial upward revisions suggest analysts expect the shipping boom to support robust profitability beyond the current year.
Astonishingly, FY26 and FY27 EPS are projected to be more than 375% above last year's earnings of $5.42 per share.
Image Source: Zacks Investment Research
INSW’s Attractive Valuation & Lofty Dividend
Despite its extraordinary rally, International Seaways may still be attracting value and income investors.
Trading near $100 a share, INSW still trades at just 6X forward earnings, a compelling valuation considering its exceptional EPS growth.
INSW still offers a slight discount to its decade-long median of 8X forward earnings and the Zacks Transportation-Shipping Industry's current average of 7X, which includes other noteworthy companies such as ZIM Integrated Shipping (ZIM - Free Report) ), Euroseas (ESEA - Free Report) ), and Scorpio Tankers (STNG - Free Report) ).
Image Source: Zacks Investment Research
Adding to its appeal is the company's generous dividend policy. International Seaways recently declared another quarterly dividend of $5.05 per share, payable December 23, with an upcoming ex-dividend date of December 9.
Annualizing that payout would imply a dividend yield exceeding 20% at current levels, although investors should recognize that INSW's substantial variable distributions depend on shipping profitability and are not guaranteed in the future.
Still, International Seaways has paid approximately $624 million in dividends over the last 12 months, with its recently declared $5.05 quarterly payout set to bring total distributions to more than $830 million across the latest four dividend declarations.
Image Source: Zacks Investment Research
Bottom Line
With its rapidly improving earnings outlook, discounted valuation, and substantial shareholder distributions, International Seaways remains an intriguing opportunity for those seeking exposure to the shipping boom.
While investors may eventually want to consider taking profits following INSW's spectacular rally, especially as unusually elevated tanker rates may normalize, the dramatic increase in earnings estimate revisions suggests the stock could still have more room to run.