A. P. Møller Mærsk (Sell, TP: DKK11500.00) - No more profits in sight
We find the continued ordering of new vessels at a time of tumbling rates and dwindling profitability concerning for the sector. While Maersk proved it could cut costs efficiently to aid Q2 margins, we expect no net profit in our forecast horizon. We believe the race to the bottom for rates has only just begun as deliveries pick up, and have downgraded the stock to SELL (HOLD) and cut our target price to DKK11,500 (14,200).A.P. Moeller Maersk is an international shipping company. Co.'s operating segments are: Container shipping and related activities which include global container services, inland transportation, manufacturing and repair of containers and container depots, and logistics and forwarding activities; APM terminals; Tankers, offshore and other shipping activities which include tanker shipping of crude oil, oil products and gas, offshore drilling activities and operation of land rigs, supply vessel activities with anchor handling and platform supply vessels, ferry services and door-to-door transportation in Northern Europe; Oil and gas activities; Retail activity; and Shipyards and other activities.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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