No-moat
Maersk
(MAERSK
B)
reported
full-year
revenue
down
more
than
a
third
from
2022
levels
and
EBITDA
down
75%
on
Thursday.
“This
was
well
flagged
before
the
earnings
release,
however,
so
if
you’re
wondering
why
the
shares
are
trading
down
heavily,
this
is
not
the
reason”,
Morningstar’s
European
market
strategist
Michael
Field
says.
In
the
annual
earnings
Maersk
provided
investors
with
an
update
on
the
turmoil
in
the
Red
Sea,
stating
that
disruptions
would
not
be
a
major
boost
for
the
company
and
an
oversupply
of
vessels
would
hit
its
earnings
this
year.
The
news
left
the
market
disappointed,
with
shares
nearly
15%
lower
on
Thursday.
Key
Morningstar
Metrics
for
Maersk
-
Fair
Value
Estimate:
17,600
DKK
(£2,016); -
Current
Price:
10,890
DKK; -
Morningstar
Rating:
★★★★; -
Morningstar
Economic
Moat
Rating:
None; -
Morningstar
Uncertainty
Rating:
High
Negativity
Priced
into
Maersk
Stock
The
warning,
which
also
led
the
Danish
group
to
suspend
its
share
buyback
programme,
is
in
stark
contrast
with
investors’
recent
optimism
about
the
sector.
“We
believe
the
wide
guidance
range
for
2024
and
the
pause
on
share
buybacks
are
the
cause,
with
investors
fearing
the
high
level
of
uncertainty,”
Field
explains.
The
analyst
is
maintaining
his
DKK
17,600
fair
value
estimate
and
believes
that
a
lot
of
negativity
is
baked
into
the
share
price
at
this
point.
Shipping
companies
have
been
among
the
best
performing
stocks
in
Europe
so
far
in
2024,
and
Maersk
started
the
first
week
of
trading
in
2024
as
the
best
performing
stock
in
Europe,
following
the
soaring
freight
rates
on
the
back
of
the
attacks
in
the
Red
Sea.
The
attacks
by
Iranian-backed
Houthi
militants
have
led
to
re-routing
of
vessels
from
the
Suez
Canal,
a
major
trading
route,
around
the
tip
of
South
Africa
adding
at
least
10
days
in
travel
time.
Shipping
Market
Remains
Oversupplied
“One
key
takeaway
from
the
February
8
release
was
that
the
supply
situation
in
shipping
markets
remains
difficult.
Supply
coming
on
in
2024
will
outstrip
demand
growth,
meaning
depressed
shipping
rates
for
some
time
to
come.
The
situation
in
the
Red
Sea,
with
attacks
on
commercial
ships,
has
helped
to
some
degree,
but
the
disruption
is
only
affecting
one
third
of
ocean
volume,
so
it
is
not
a
panacea
for
the
structural
oversupply.
This
is
a
key
driver
of
the
suspension
of
the
share-buyback
program”,
Field
says.
Another
big
announcement,
and
possible
muddying
of
the
waters,
was
that
Maersk’s
towage
business,
Svitzer,
will
be
spun
off.
“This
is
not
a
game-changer
by
any
means
and
is
unlikely
to
unlock
substantial
value.
However,
it
is
one
more
step
toward
Maersk
becoming
a
more
simplified
shipping
and
logistics
business”,
according
to
Michael
Field.
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