The expected boost to AP Moller-Maersk's share price has failed to materialise after the giant Danish boxship operator hiked its profit forecast on Tuesday.
The stock ended flat in Copenhagen on Tuesday afternoon, although it was trading up 3% at DKK 10,975 ($1,732) per share on Wednesday afternoon.
The company raised its 2020 Ebitda prediction to between $7.5bn and $8bn after the containership market rebounded through the third quarter following pandemic pressures.
Most analysts reacted positively to the news, and Norwegian investment bank Fearnley Securities said the lack of response from investors was "disappointing."
The 15% increase in the forecast would usually translate into a share price rise of between 5% and 10%, Fearnley added.
"The share has more than doubled since March, sitting at a three-year high, suggesting that there is a degree of profit-taking here," Fearnley analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart said.
High hopes
Fearnley is estimating Maersk's freight rates rose 5% in the third quarter, which it called "probably a bit disappointing to some when compared to the developments in the Shanghai Container Freight Index indices".
"Considering that volumes will likely improve further in the fourth quarter, Maersk's implied fourth quarter Ebitda range of $1.9bn to $2.4bn assumes limited, if any, improvements in freight," the analysts said.
They view the company's fourth quarter expectations as conservative, however. The analysts noted that there is a time lag between spot rates and profit and loss recognition, suggesting that third quarter earnings include voyages started as early as April and May.
As a comparison, Fearnley said the rally in spot rates did not really start until late July.
The bank now estimates the containership giant's Ebitda to hit $2.4bn, 20% above the consensus expectation by analysts. Fearnley has a buy rating on the stock and a target price of DKK 14,000.
Scope for big renewals
The analysts see significant upside in contract renewals, supporting $2.5bn-plus Ebitda per quarter.
Fearnley's low case Ebitda forecast for 2021 is $7bn, if volumes are flat and spot rates fall 25%, but are offset by 15% higher contract rates.
The base case is for earnings of between $9bn and $10bn.
Frode Morkedal, managing director of equity research at Clarksons Platou Securities, was cautious after the forecast.
"The full year guidance was, in our view, lifted less than what one should have expected given the currently strong spot rates," he added.
"We believe this could mean Maersk assumes a normalisation of rate levels in the fourth quarter."
Maersk also said it would be laying off 2,000 staff as part of a reorganisation of its shipping and logistics businesses.
