Maersk’s Buying Position Calling For Investors

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  • Analysts at Barenberg upgraded the Danish container-shipping company to buy from hold in a note to clients .
  • They also said Maersk’s low Valuation leaves a downward protection for investors.
  • Maersk’s shares have been tightly linked to how freight rate moves.

Increased share price

With a trough in valuation and a return scheduled for 2022, A.P. Moeller-Maersk is “too gripping to ignore,” and investors should buy the stock. Barenberg analysts upgraded MAERSK.B, 1.42% MAERSK.A, +1.19% to buy from hold in a client note on Friday.

Doomsday scenario

“As freight rates have fallen over the summer, Maersk’s share price has fallen c40% from its August peak. We believe that a doomsday scenario is now being priced in.

With a 29% increase from current levels, the analyst’s price target was left at 18,500 Danish kroner. On Friday, Maersk B class shares gained more than 1% to 14,575 krone.” says analyst William Fitzalan Howard.

Pent-up demand

Global shipping companies have made healthy profits in the last two years as a result of pent-up demand following Covid, but are now facing difficult times, according to shipping analysts Drewry in their latest Container Forecaster report.

High inflation

“Maersk’s shares have a 34% return yield due to a $11.5 billion return for the fiscal year 2022 that is expected to be paid on March 23.”

“Given the company’s current net-cash position, we believe this dividend is secure and provides a c90% annualized cash return on the investment.” said William.

Dramatic transformation

“The dividend yield, fleet value, and increased non-container assets should all contribute to the shares’ valuation. Despite recurrent concerns, the dramatic transformation of the business means that it looks oversold to us,” said the analyst.

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Source:- Market watch

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