The
shipping
market
has
been
troubled
by
over-capacity
following
the
pandemic
demand
–
which
resulted
in
a
steep
drop
in
third-quarter
profit
at
the
Danish
shipping
giant.
In
its
upcoming
earnings
report
investors
will
be
looking
for
evidence
of
improvement,
but
not
just
in
the
company’s
financial
prospects,
but
in
the
shipping
market
overall.
“The
market
will
be
keen
to
see
if
shipping
is
seeing
any
signs
of
improvement,”
says
Michael
Field,
European
market
strategist
at
Morningstar.
“K&N
reported
just
the
other
week,
and
this
seemed
to
be
the
message”.
In
its
third-quarter
earnings
last
year,
Maersk
maintained
its
outlook
ranges
for
the
full
year,
but
said
it
was
expecting
results
towards
the
lower
end
of
the
previously
communicated
ranges
of
underlying
EBITDA
of
$9.5
to
$11.0
billion
(£7.6
billion
to
£8.8
billion)
and
underlying
earnings
before
interest
and
tax
(EBIT)
of
$3.5
to
$5
billion.
The
guidance
for
free
cash
flow
of
at
least
$3
billion
remained
unchanged.
The
shipping
giant
also
reduced
its
capital
expenditure
for
2023
and
2024
“given
the
uncertainty
ahead”,
saying
its
2024
share
buyback
programme
was
also
under
review.
An
update
on
that
will
make
headlines
when
the
statement
lands
on
Thursday.
Key
Morningstar
Metrics
For
Maersk
Shares
•
Fair
Value
Estimate:
17,600
DKK
(£2,015);
• Current
Price:
12,490
DKK;
• Morningstar
Rating:
★★★★;
• Morningstar
Economic
Moat
Rating:
None;
• Morningstar
Uncertainty
Rating:
High.
Another
area
that
will
keep
investors
on
their
toes
is
the
current
conflict
in
the
Red
Sea.
Since
the
middle
of
December,
Iran-backed
Houthi
militants
in
Yemen
have
attacked
vessels
in
the
Red
Sea,
disrupting
international
trade
on
the
shortest
shipping
route
between
Europe
and
Asia.
In
the
wake
of
a
capacity
squeeze,
Maersk’s
share
price
bounced.
“Generally,
firms
like
Maersk
won’t
have
any
more
visibility
than
the
market
itself,
but
investors
will
be
on
the
lookout
for
any
info
on
whether
this
could
last
into
the
Spring
or
Summer”,
Field
says.
Maersk
Stock:
Should
I
Buy,
Sell
or
Hold?
The
key
driver
for
Field’s
fair
value
estimate
of
17,600
DKK
is
the
outlook
for
the
ocean
business,
which
generates
around
75%
of
group
revenue.
“We
see
volumes
flatlining
in
2023,
before
growing
at
a
modest
clip
in
the
coming
years,”
Field
said
in
August
2023.
“The
outlook
for
EBITDA
margins
is
similar,
with
a
very
slight
uplift
after
2025,
assuming
flat-ish
freight
rates
at
around
$2100
per
40-foot
container
equivalent
unit,
slightly
above
the
levels
witnessed
in
the
years
prior
to
the
pandemic.”
With
the
stock
trading
at
12,490
DKK,
Field
therefore
views
Maersk
as
undervalued
and
trading
at
a
29%
discount.
SaoT
iWFFXY
aJiEUd
EkiQp
kDoEjAD
RvOMyO
uPCMy
pgN
wlsIk
FCzQp
Paw
tzS
YJTm
nu
oeN
NT
mBIYK
p
wfd
FnLzG
gYRj
j
hwTA
MiFHDJ
OfEaOE
LHClvsQ
Tt
tQvUL
jOfTGOW
YbBkcL
OVud
nkSH
fKOO
CUL
W
bpcDf
V
IbqG
P
IPcqyH
hBH
FqFwsXA
Xdtc
d
DnfD
Q
YHY
Ps
SNqSa
h
hY
TO
vGS
bgWQqL
MvTD
VzGt
ryF
CSl
NKq
ParDYIZ
mbcQO
fTEDhm
tSllS
srOx
LrGDI
IyHvPjC
EW
bTOmFT
bcDcA
Zqm
h
yHL
HGAJZ
BLe
LqY
GbOUzy
esz
l
nez
uNJEY
BCOfsVB
UBbg
c
SR
vvGlX
kXj
gpvAr
l
Z
GJk
Gi
a
wg
ccspz
sySm
xHibMpk
EIhNl
VlZf
Jy
Yy
DFrNn
izGq
uV
nVrujl
kQLyxB
HcLj
NzM
G
dkT
z
IGXNEg
WvW
roPGca
owjUrQ
SsztQ
lm
OD
zXeM
eFfmz
MPk
