MPC Container Ships (Sell, TP: NOK15.70) - Too-optimistic valuation
With the recent share price rise, we find the stock diverging from fundamentals. We believe USD18.5k/day average rates are needed for its open days until end-2026 to defend the current valuation – a rate seen only in 2004–2008 (USD20.3k/day average) except for the post-pandemic boom. With the 17% deliveries planned for 2024–2025e (4% delivered YTD), we believe the valuation looks rich, and have downgraded to SELL (HOLD), but raised our target price to NOK15.7 (14.6) on a stronger than expected freight market near-term.
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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