MPC Container Ships (Sell, TP: NOK19.00) - High rates, but overinflated shares
The strong freight market has allowed for attractive TC fixtures for MPCC, but rates are now slipping. We still believe the container market is set for years with soft markets on only 6% volume growth YTD versus 2019, but with a c30% increase in the fleet capacity. Thus, while we continue to assume solid rates and duration for vessels set to end their contracts until Q3 2025, we find the risk/reward skewed to the downside. We reiterate our SELL, but have raised our target price to NOK19.0 (18.5).
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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