Tokmanni (Buy, TP: EUR17.00) - Q1e hurt by external setbacks

We are just shy of consensus Q1e clean EBIT, reflecting demand challenged by several external setbacks. However, we continue to view Tokmanni as an attractive countercyclical case amid weak consumer trends, with an unduly low valuation despite a sharp step-up in its growth profile since last year’s acquisition of DollarStore. We reiterate our BUY and EUR17 target price.

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).

Tokmanni (Buy, TP: EUR17.00) - Q4 fine overall

We looked for slightly more LFL growth (sales and visits), but DollarStore profitability was very strong. Financing costs also burdened EPS more than we expected. With an attractive valuation and optimistic 2024 demand outlook, we reiterate our BUY, but have reduced our target price to EUR17.0 (17.5).

Tokmanni Minor model adjustments

We have updated our estimates to reflect the company’s pre-announced 2023 figures (full results due on 22 March at 07:00 CET). We do not consider these changes to be material, and we have not changed our BUY recommendation. However, we have nudged up our target price to EUR17.5 (EUR17.0), and believe underlying market trends continue to favour discounters.

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...

A. P. Møller Mærsk (Sell, TP: DKK9500.00) - No relief in sight

Maersk’s 2024 outlook solidified our view that headline spot rate movements should be insufficient to save liners from a challenging market that should soon see a race to the bottom once more. In the ensuing dogfight, someone will have to lose out in order to rebalance a vastly oversupplied market. With such an outlook, current cash buffers are of limited value to investors. We reiterate our SELL, and have cut our target price to DKK9,500 (10,400).

A. P. Møller Mærsk (Sell, TP: DKK10400.00) - Expect the unexpected

The 2024 guidance should be the highlight of the Q4 report and clarify the potential implications for Maersk of Red Sea disruptions in an uncertain container market. Assuming normalisation in H2, we reiterate our SELL but have raised our target price to DKK10,400 (9,600).

Tokmanni (Buy, TP: EUR17.00) - CMD not to be discounted

We expect Tokmanni to provide an update to its medium-term strategy and financial targets at the February CMD – we estimate EUR2bn in sales and cEUR175m in clean EBIT. We expect healthy growth for 2024, supported structurally by lacklustre consumer sentiment, and the upcoming CMD to be the next catalysts for the stock. We reiterate our BUY and have raised our target price to EUR17 (15).

Tokmanni Group Corporation: 2 directors

A director at Tokmanni Group Corporation bought 15,000 shares at 12.831EUR and the significance rating of the trade was 80/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two ...

Tokmanni (Buy, TP: EUR15.00) - Encouraging synergy and near-term tradi...

Despite the c3% clean EBIT miss on lower growth and higher costs in Q3, Tokmanni signalled confidence about reaching its target of over EUR15m in annual net synergies from the DollarStore acquisition, and that the Christmas season has begun “very well” for both businesses, suggesting a stronger Q4. We reiterate our BUY and EUR15 target price.

Decisive hit from weaker macro

Deteriorating macroeconomics and concerns about an impending recession have added to an already-grim outlook. The 2023 demand setback is polarising supply and demand as the towering orderbook pushes 2023–2026e supply growth towards 7% p.a. with demand set to be closer to 2%. Hence, utilisation should fall to record-lows, fuelling a race to the bottom for rates. The ensuing industry-wide cash burn looks set to decimate sector balance sheets. With no bright spots on the horizon, we reiterate our S...

A. P. Møller Mærsk (Sell, TP: DKK11500.00) - Set for another near-term...

Based on recent data points, we have raised our Q3e due to a slower rate decline and more cost-cutting potential. We are now 16% above consensus’ Q3 EBITDA, but remain 30% below for 2024e and 2025e. Thus, we forecast a near-term beat, but expect focus to remain on long-term prospects that should continuously deteriorate. We reiterate our SELL and DKK11,500 target price.

Tokmanni (Buy, TP: EUR15.00) - Market advantage

In the upcoming Q3 results (due on 17 November), our focus will be on profitability and the outlook, as well as on the recently acquired DollarStore’s performance. We expect the Q3 figures to show healthy growth in a lacklustre market. We reiterate our BUY and EUR15 target price on an attractive valuation.

A. P. Møller Mærsk (Sell, TP: DKK11500.00) - No more profits in sight

We find the continued ordering of new vessels at a time of tumbling rates and dwindling profitability concerning for the sector. While Maersk proved it could cut costs efficiently to aid Q2 margins, we expect no net profit in our forecast horizon. We believe the race to the bottom for rates has only just begun as deliveries pick up, and have downgraded the stock to SELL (HOLD) and cut our target price to DKK11,500 (14,200).

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