Still cheap and the Red Sea is still closed

A. P. Møller Mærsk (Sell, TP: DKK9400.00) - Resistance to gravity seem...

The Q1 report was largely as expected, albeit with support in the results related to mostly passing effects. Hence, we retain our view that the chronic oversupply of vessels will deteriorate the current value of the company. On rates converging towards 2016 levels, it should burn through more than USD13bn by the end of our forecast period, with no respite in sight due to the towering orderbook and owners still willing to order. We reiterate our SELL, but have raised our target price to DKK9,400 ...

Q1'25 beat driven by Ocean and Terminals

A. P. Møller Mærsk (Sell, TP: DKK8800.00) - Overcapacity at the gates

We find the recent share price strength surprising and likely short-lived due to a challenging supply/demand balance, only augmented by the escalating trade tensions. While we expect a Q1 beat versus consensus, we believe the company’s outlook is unlikely to satisfy buy-side expectations, and we see sizeable downside risk to the current valuation. We reiterate our SELL and have cut our target price to DKK8,800 (10,800).

Tariffs will hurt, but cons. is too low for Q1

Another abrupt change

The US Trade Representative on 17 April published revised US port fees with significant changes to the initial proposal based on industry feedback. In its current form, the fees will primarily discourage use of Chinese-controlled maritime trade services to the US, and directly affect the use of Chinese-built vessels in US ports (with several considerable exemptions to avoid harm to US trade). The previous broader fees based on fleet composition and share of Chinese-built vessels has been scrappe...

MPC Container Ships (Hold, TP: NOK14.90) - Risk/reward balanced on sel...

Given the recent sell-off in the MPC Container Ships shares, we find the risk/reward balanced, with upside potential on the monetisation of assets given its >NOK30 NAV/share, complemented by a healthy contract backlog supporting dividends, set against our negative view of the container sector on oversupply for the foreseeable future. Hence, we have upgraded to HOLD (SELL), but reduced our target price to NOK14.9 (17.9).

‘The times they are a-changin’

The recurring theme at our 18th Energy & Shipping Conference was geopolitical uncertainty and a potential trade war, warranting a wait-and-see approach, particularly on the Trump 2.0 effect. The consensus view pointed to high asset values, with no rush to the yards, aligning with below-NAV valuations across most of our coverage. However, panellists generally saw less downside risk than the 25% average discount to steel for our Tanker, Dry Bulk and Gas coverage. Overall, the day highlighted uncer...

MPC Container Ships Minor model adjustments

We have updated our estimates in light of the Q4 report, including an updated charter backlog, and made minor adjustments to costs. We still see the container market as set for a prolonged downturn for the foreseeable future on 30%+ supply growth, versus

A. P. Møller Mærsk (Sell, TP: DKK10800.00) - Just too many ships

We expect Q4 to mark a turning point, with probable distributions announced and clear downside risk. Simply comparing the ratio of ships to cargo, we find there should be a significant number of ships without work versus 2019, and believe the depth of the downturn has yet to be priced in. We have downgraded to SELL (HOLD) and cut our target price to DKK10,800 (11,700).

Red Sea re-opening is well discounted

Q4 beat and '25 guidance better than feared

MPC Container Ships (Sell, TP: NOK17.10) - Facing a lasting container ...

The container market is set for a lasting downturn on 30%+ supply growth since 2019, barely offset by sub-10% volume growth, and with a 27% orderbook yet to be delivered, inevitably affecting charter appetite and rates, in our view. Despite the upside potential from monetising asset values, on our NOK34/share NAV, we believe the risk is tilted towards the downside. We reiterate our SELL and have cut our target price to NOK17.1 (18.6).

A playbook on US tariffs

As a response to recent news flow of potential tariffs and countermeasures, we highlight the main implications for the shipping sectors we cover. While the specifics remain uncertain, the below input might assist in gauging potential impacts of the disruptions.

A. P. Møller Mærsk (Hold, TP: DKK11700.00) - Potential for USD4bn–8bn ...

We expect the Q4 results to reflect continued strength in the container freight market, which picked up further over December–January, and have raised our 2025 forecasts. However, our 2025e EBITDA of USD6.0bn remains 17% below Bloomberg consensus. With guidance likely the main focus, we expect it to target underlying EBITDA of USD4bn–8bn. As vessel oversupply is set to continue hampering rates for a dreary long-term outlook, we reiterate our HOLD and DKK11,700 target price.

A final 2024 guidance upgrade in the making

ABGSC Shipping Daily 29 November

Container spot rates up again 3% w-o-w, contract rates flat, HAUTO signs 2-year contract with a "major international car producer", Flex LNG announces 15yr time charter for Flex Constellation

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

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