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

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%.

MPC Container Ships (Sell, TP: NOK18.20) - Early stages of a longer do...

MPC Container Ships has capitalised on recent market strength, raising its 2025–2026 coverage to 81–50%. Although we believe this justifies some share-price appreciation, we find the 115% YTD gain excessive. We believe the 13% decline in rates since July marks only the early stage of a prolonged downturn, with years of oversupply likely ahead. Thus, we believe the valuation reflects an overly optimistic outlook, leaving risk skewed to the downside. We reiterate our SELL but have cut our target p...

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.

MPC Container Ships (Sell, TP: NOK19.00) - High rates, but overinflate...

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)...

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.

MPC Container Ships (Sell, TP: NOK18.50) - Hot markets, but overheated...

We have raised our estimates on a read-across from the recent TC contracts and assume all 29 vessels ending their current contracts until Q3 2025 to be fixed at similar levels (average USD20k/day). However, we find the c100% share price appreciation YTD excessive, with risk/reward to the downside as we expect inevitable headwinds for the container market exacerbated by a potential return to the Red Sea. We reiterate our SELL, but have raised our target price to NOK18.5 (16.3).

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.

MPC Container Ships (Sell, TP: NOK16.30) - Stretched valuation

New charters presented MPCC’s potential to add to its backlog at constructive rates in the current healthy freight market raised by disruptions and solid volumes. However, we still find the 80% YTD share price return excessive. We estimate average rates more than 25% above current levels are required for open days until 2026 to justify the current share price, leaving a poor risk/reward, in our view. We reiterate our SELL, but have raised our target price to NOK16.3 (15.7).

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 f...

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).