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

Solid report; FY guidance looks low

Q3'24 as pre-announced last week. Segments - Beat in all segments. Freight rates better than modelled, share up 1-3%.

A. P. Møller Mærsk (Hold, TP: DKK11500.00) - Likely topping out in Q3

While the Q3 results posted a ~USD1bn beat to our and consensus expectations likely due to stronger container shipping markets, we believe the implications for long-term estimates are limited, as its updated guidance indicates a ~USD2bn QOQ decline for Q4. Hence, the Q3 beat on a stand-alone basis would add up to 4% to the market cap, all else equal.

Guidance upgrade equals 5% of market cap

Q3'24 EBITDA of USD 4.8bn (ABGSCe at USD 4.5, cons. at USD 3.6). Increases full year guidance - Not unexpected. Higher guidance warrants a positive share price reaction.

Q3e EBITDA lifted 32%; consensus too low

YTD container demand growth of 18%. Consensus too low for Q3; potential guidance upgrade for '24. TP of DKK 14,300 (14,550) – BUY.

A. P. Møller Mærsk Minor model adjustments

We have updated our estimates for the Q2 report. We do not consider these changes to be material, and we have not changed our HOLD recommendation. We reiterate our DKK11,500 target price. Potential for more buybacks. While we still see a heavy delivery schedule weighing on the fundamental supply/demand balance for the foreseeable future and believe much of the apparent demand to be transitory, we find Maersk’s compounding value generation in today’s inflated freight-rate environment supportive o...

Low visibility, but still too cheap

Beat in Terminals and Logistics, miss for Ocean

Q2'24 as pre-announced. Segments - Beat in Terminal and Logistics, miss for Ocean. Rather neutral report, flat to slight positive share price reaction expected.

A. P. Møller Mærsk (Hold, TP: DKK11500.00) - Gifted an additional ~USD...

We have raised our 2024-26e cash flow by ~USD6bn flow on the surprising tenacity of the container market which adds directly to our valuation. However, the market cap is up less than USD2bn, strengthening the group’s relative value, in our view. We still see a fundamentally oversupplied container shipping market, but acknowledge the current backdrop offers additional upside potential. We have upgraded to HOLD (SELL) and raised our target price to DKK11,500 (9,000).

Q2 miss outweighed by higher guidance

Q2'24 EBITDA of USD 2.1bn (ABGSCe at USD 2.2, cons. at USD 2.3). Increases full year guidance - Not entirely unexpected. Higher guidance warrants a positive share price reaction.

Red Sea closure means no oversupply in '25-26

No oversupply with the Red Sea closed. '24e EBITDA of USD 8.6bn. +9% vs. consensus. TP of DKK 14,550 (12,800) – BUY.

A. P. Møller Mærsk (Sell, TP: DKK9000.00) - USD3bn added to 2024 guida...

We estimate the raised 2024 guidance leaves cUSD2bn potential upside to consensus EBITDA, or DKK820/share added cash flow. However, since its last guidance was released on 2 May, the shares are up DKK2,400, nearly 2x the potential upside for consensus to match the high end of the new guidance. Hence, we believe much should already be priced in, but that the news could raise the share price on continued strong rate momentum.

A. P. Møller Mærsk (Sell, TP: DKK9000.00) - Challenging the deep value...

The Q1 results proved disappointing to buy-side expectations, though reasonably aligned and even bullish compared to near-term consensus. Their market commentary could raise expectations above the upper end of the potentially conservative guidance, but we struggle to see the intrinsic value when facing the bleak container markets for 2025–2026e. We reiterate our SELL and have cut our target price to DKK9,000 (9,600).

Continued strong demand will make a difference

Surprisingly strong container demand makes a big difference. '24e EBITDA of USD 6.2bn. TP of DKK 12,800 (13,260) – BUY.

Better guidance, but within expectations

Q1'24 EBITDA of USD 1,590m (ABGSCe at USD 1,941, cons. at USD 1,604m). Segments - miss for Ocean and Logistics & Services, beat in Terminals and Towage. Lower end of guidance lifted, share slightly up today.

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.

Too cheap with near-term earnings upside

Underlying demand much better than expected. Guidance upgrade likely - ABGSCe '24 EBITDA +20% vs. cons.. TP of DKK 13,260 (10,700) – BUY (Hold).

A. P. Møller Mærsk (Sell, TP: DKK9600.00) - Loose ends into Q1 results

There is a substantial discrepancy between container liners’ reported and guided revenue for Q1, as the impacts of the Red Sea disruption and resurgent freight rates are revealed. Near-term consensus could be too low, but the 2025–2026 outlook is set to be much worse than the market believes. We reiterate our SELL, but have raised our target price to DKK9,600 (9,500).

A brewing challenge for the yards

Our 17th Annual Energy & Shipping Conference was well attended by investors and industry executives showcasing the still-growing interest for the sectors. Limited yard capacity is fuelling high newbuilding prices and raising freight rate expectations for the vast fleet renewal necessary in the coming decade. Long lead times underpin a bullish supply story for much of shipping in the coming years, albeit exposed to geopolitical risks affecting trade patterns. Our overall impression was general op...