Frontline Ltd. (FRO)
Valuation Overview•Is Frontline Ltd. Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Moderate quality score of 69/100, reflecting stable operating margins and manageable leverage.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is cautious, forecasting potential downside alongside robust expected earnings growth. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
FRO exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (11.2% 3Y CAGR) however, earnings have severely contracted over the same period. This growth is supported by elite operational efficiency, sustaining an impressive 38.9% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $714.2M | -4.2% | +11.2% | +10.0% | +15.7% | |
| EBITDA | $446.0M | — | +14.7% | — | — | |
| Net Income | $559.1M | -23.5% | -7.3% | — | +9.4% | |
| EPS (Diluted) | $2.51 | -23.8% | -8.5% | -4.0% | +2.8% | |
| Free Cash Flow | $59.5M | +474.6% | +133.0% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 41.5% | 36.8% | 29.6% | 28.2% |
| Operating Margin | 38.9% | 36.6% | 28.4% | 21.3% |
| Net Margin | 40.2% | 26.6% | 22.2% | 13.3% |
| FCF Margin | 26.3% | -5.9% | -13.5% | -22.7% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.44 | $2.51 | +2.9% | ||
| Q1'26 | $1.15 | $1.03 | -10.4% | ||
| Q4'25 | $0.27 | $0.19 | -28.8% | ||
| Q3'25 | $0.42 | $0.36 | -14.3% | ||
| Q2'25 | $0.19 | $0.18 | -4.6% | ||
| Q1'25 | $0.20 | $0.20 | +0.0% | ||
| Q4'24 | $0.43 | $0.34 | -20.9% | ||
| Q3'24 | $0.67 | $0.62 | -7.5% |
Total return is +125.4% (1Y), outperforming the benchmark by +100.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +111.4% | +102.1% | — |
| 1Y | +125.4% | +100.4% | +16.0% |
| 3YCAGR | +46.7% | +25.0% | +43.6% |
| 5YCAGR | +43.3% | +28.5% | +103.7% |
| 10YCAGR | +20.0% | +6.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Frontline Ltd. (FRO) valuation, health, and returns.
Frontline Ltd. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +83.6% upside to DCF intrinsic value of $75.14)
Frontline Ltd. has multiple valuation anchors: DCF Intrinsic Value: $75.14 | Peer Relative Fair Value: $51.44 | Wall Street Analyst Target: $38.50 (implying -5.9% upside). A convergence of these signals offers higher conviction.
Frontline Ltd. displays good financial health with a composite quality score of 69/100, supported by a Altman Z-Score of 2.3 (grey zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 8.1%.
Frontline Ltd. pays a 2.3% dividend yield, covered by a 55% payout ratio with 0 years of growth, supplemented by a 0.0% buyback yield.
Frontline Ltd.'s current growth trajectory is Decelerating. The company achieved -4.2% 1Y revenue growth and -23.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +11.2%.
Wall Street consensus is Hold based on 22 analysts, beating EPS expectations in 17% of recent quarters with a 1-quarter streak. The consensus price target represents a -5.9% change from current levels.
Investment risks for Frontline Ltd. include: -23.8% 1-year max drawdown. Volatility risk is characterized by a beta of 0.46x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.