Maersk Shares Face Headwinds Amid Shifts in Maritime Supply and Demand Dynamics

Sell recommendations on A.P. Moller – Maersk A/S shares are piling up as worries return about oversupply in the shipping market.

Morgan Stanley gave the Danish company its 10th sell-equivalent rating on Wednesday (Dec 4, 2024) as it cut the stock to underweight from equalweight. Only two members of the Stoxx Europe 600 index — Polish video-game maker CD Projekt SA and Austrian power firm Verbund AG — had a higher tally of bearish ratings as of Dec. 3, data compiled by Bloomberg shows.

“Negative earnings risks make Maersk a value trap,” said Morgan Stanley analyst Cedar Ekblom and colleagues in a note. “We see container supply growth materially outpacing demand.”

Oversupply concerns have reemerged after a boost to shipping rates from attacks on Red Sea vessels by Houthi rebells faded. The sector has been left with excess capacity after it invested in fleets during disruption caused by Covid-19. Meanwhile, new tariffs pledged by US president elect Donald Trump are seen potentially curbing demand.

Maersk shares took a double hit on Dec. 4 as JPMorgan Chase & Co. slashed its price target to 8,450 kroner from 9,000 kroner, suggesting a 33% decrease from Tuesday’s close. The stock fell as much as 4% to 12,035 kroner.

“Industry dynamics remain unfavorable given structural oversupply,” analyst Alexia Dogani wrote in a note.

Source: Bloomberg via Yahoo! Finance

Original news report available here

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