MPC Container Ships (Sell, TP: NOK18.60) - Firm backlog, too-high valuation

We believe the container market is set for a prolonged downturn on 30%+ supply growth since 2019, hardly offset by sub-10% volume growth, and with a 25% orderbook-to-fleet ratio ahead, inevitably hitting charter appetite and rates. While upside potential exists from monetising asset values, given our NOK33/share NAV, we struggle to defend the valuation and believe the risk is skewed to the downside. We reiterate our SELL, but have raised our target price to NOK18.6 (18.2).

A. P. Møller Mærsk (Hold, TP: DKK11700.00) - Anchored by challenges

We fail to be excited by the largely pre-announced Q3 and recently revised guidance, but concede the valuation in Maersk looks depressed, albeit for a very good reason. More newbuild orders from the latest cash build mean another delivery wave on top of an already structurally overbuilt industry. We remain muted on the sector and reiterate our HOLD, and have lowered our target price to DKK11,700 (11,500).

New guidance already looks conservative

Hafnia Minor model adjustments

We have updated our estimates owing to the Q3 report and Q4 guidance. Hence, we have raised our 2024e EBITDA by 1%, while we have lowered our 2025–2026e by 2–1%. We continue to be positive on the tanker space, and forecast an 18–19% earnings yield for 2025–2026. Combined with its LTV now being below the 20% threshold for a 90% payout ratio, this should bode well for capital returns through dividends and/or accretive buybacks (we estimate a P/NAV of 0.7x). We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our NOK96 target price.

The weekly navigator

From the past week, we highlight: 1) Kinnevik led a USD130m funding round in Enveda; 2) Latour continues delivering on its M&A agenda; 3) Lundbergs reported Q3 NAV was up 7% QOQ, as the Lundberg sphere tightens its grip on Industrivärden; and 4) we met VEF, following its portfolio company BlackBuck’s recent IPO.

Kindred Group (No_rec, TP: SEK) - Discontinuing coverage

We have discontinued coverage of Kindred Group following the delisting of the stock after the acquisition by Française des Jeux. Our last published recommendation, target price and estimates should no longer be relied upon.