Bottlenecks in the world’s supply chains contributed to an explosive rate increase for sea freight last year, and burst container capacity and cork formations in the ports indicate that rates will remain high well into 2022.
After a stronger fourth quarter still awaited, Danish AP Møller-Mærsk has expectations for the 2021 result once again earlier in January, and the share reacted by reaching a new all-time high. The result is likely to top earnings in previous years overall.
Think the tangles will persist
Kepler Cheuvreux believes that the company with its latest guiding for the 2021 result illustrates the current strength of the container market.
«Spot prices are still at high levels, driven by constraints in the global logistics chain. Solving these problems will probably take time, and therefore we continue to believe in a combination of high contract and spot prices in 2022 and beyond », writes chief analyst for shipping Anders Redigh Karlsen in an update.
“We can see some relief from 2023 onwards, but the gains are likely to remain high. We raise our forecasts to reflect this strength. As a result, we raise our price target and keep the buy recommendation “, he continues.
More specifically, the price target will be raised from DKK 24,900 to DKK 29,200. On Wednesday afternoon, the share stands at 22,900 Danish kroner, after more than 3 percent rise on the Copenhagen Stock Exchange. Thus, Redigh Karlsen can see an upside of 27–28 percent from today’s levels.
Course records in line?
If the chief analyst hits with his forecasts, the price records in Maersk will be in line – as the container ships do around the world’s ports. The previous price target of DKK 24,900 was just below the current all-time high of DKK 24,920.
Redigh Karlsen estimates a profit after tax of $ 27.9 billion for Maersk in 2022, which is far above the consensus of $ 17.0 billion. The $ 20.2 billion 2023 forecast is more than double the $ 7.0 billion consensus.
The same is true for 2024, with Kepler analysts eyeing $ 8.6 billion, with a consensus of $ 3.9 billion.
On the Oslo Stock Exchange, the container shipping company MPC Container Ships rises 2.3 percent to NOK 29.60 on Wednesday afternoon. The share reached an all-time high of NOK 31.30 last Friday.