Goldman Sachs Raises COSCO Target 81% on VLCC Supercycle

Edgen Stock·Mar 23 2026, 06:06

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Key Takeaways

Goldman Sachs issued a major upgrade for COSCO SHIPPING Energy, citing a supercycle in the Very Large Crude Carrier (VLCC) market driven by tight capacity and geopolitical tensions. The bank's analysis points to a period of exceptionally high profitability for the oil tanker operator.

Target Price Increase: Goldman Sachs boosted its H-share target price for COSCO SHIPPING Energy by 81% to HKD 29.
Supercycle Forecast: The bank raised its 2026 daily VLCC spot rate forecast from $80,000 to $150,000 per day.
Profit Upgrade: Consequently, COSCO's 2026 net profit forecast was increased by 81% to RMB 13 billion, implying a 23% return on equity.

Goldman Raises COSCO's Target 81% on Supercycle Outlook

Goldman Sachs dramatically increased its valuation for COSCO SHIPPING Energy (01138.HK) on March 23, raising its H-share target price by 81% to HKD 29. The bank projects a supercycle for Very Large Crude Carriers (VLCCs), fueled by constrained shipping capacity, oil restocking, and trade lane rerouting. Analysts now forecast 2026 daily Time Charter Equivalent (TCE) rates will average $150,000, a steep increase from the previous estimate of $80,000. This revision directly impacts COSCO's bottom line, with Goldman lifting the company's 2026 and 2027 profit forecasts by 81% and 59% to RMB 13 billion and RMB 11 billion, respectively. The new estimates imply a robust return on equity of 23% for 2026.

Geopolitical Tensions Propel VLCC Rates Past $270,000

The bullish forecast for tanker rates is underpinned by a volatile geopolitical landscape. The ongoing conflict in Iran has caused Brent crude oil futures to climb over 70% this year, trading around $105 per barrel and creating an energy-focused price shock. This has intensified demand for oil transport and pushed VLCC spot rates to extreme levels, with some fixtures briefly surpassing $270,000 per day before failing in the volatile market. While this volatility highlights market uncertainty, the underlying trend of soaring rates provides a strong basis for Goldman's optimistic view on the sector's earning potential and justifies the significant upgrade for a key operator like COSCO SHIPPING Energy.