Maersk share price outlook improves as market cap tops $50 billion

Maersk share price expectations improved sharply after strong second-quarter results and higher freight rates pushed analysts to raise their targets, according to Alphaliner.

Share prices for the majority of the leading public container carriers hit 52-week highs in August and September after the publication of strong Q2 results. Of the 11 top- and mid-tier companies surveyed by Alphaliner, eight operators saw their stock price reach yearly peaks in the weeks following. Only HapagLloyd, HMM and Yang Ming missed out, having seen their stocks peak in March.

Since then, signs of robust demand, ongoing geopolitical disruption and persistent port congestion have raised expectations for a continuation of strong rates.

Following liner operating profits of $935 M and a 22% year-on-year increase in rates (far higher than the other carriers) in Q2, AP Moller-Maersk’s (APMM) prospects have been quickly revised by banks. Six analysts, including HSBC, Morgan Stanley, Fearnley Securities, Citi, Goldman Sachs and Kepler Cheuvreux, raised their price targets on the group in September, with HSBC and Fearnleys both slapping a buy rating on the stock. HSBC raised its target price a second time last week to DKK 27,000.

In addition to upbeat expectations for the market over the rest of the year, it was recognised that APMM had been particularly effective in capturing the positive effects of higher rates. It follows an increase in its spot-exposed shipping capacity (now 56%), as well as the impact from unspecified digital investments.

Source: Alphaliner