Top analyst predicts calmer seas for shipping giant
The top-ranked analyst covering shipping giant AP Moeller-Maersk has turned bullish on the stock.
Investors who listened to Frans Hoyer over the past year have made 35pc on their Maersk bets, the best performance of the 29 analysts tracked by Bloomberg and double the return rate delivered by the second-best forecaster.
Hoyer, who works for Jyske Bank, changed his recommendation on Maersk shares to buy from sell on Wednesday.
And he raised his 12-month price target to 12,000 kroner, which was about 18pc above the spot price. He says Maersk shares have fallen too much this year and predicts the Danish conglomerate will benefit from a "calmer" shipping market in 2016.
Maersk shares rose 1pc to 10,350 kroner as of 9.48am in Copenhagen yesterday, adding to Wednesday's 1pc gain. The stock is trading at its highest since November 10.
"We're starting to see signs that the container shipping market is heading for better times," Hoyer, who's vice president of equity research at Silkeborg, Denmark-based Jyske, said in a phone interview.
"Maersk Line will be coming off a low in 2016 and we think the time for downgrades is over for the time being."
Maersk shares had lost about 32pc since an April 10 peak after the shipping market was dragged down by a toxic cocktail of too many vessels just as global demand for trade sagged. Meanwhile, Maersk's oil unit has been pummeled by a 60pc slump in Brent crude prices since a June 2014 peak.
To deal with the tougher market climate, the company has announced substantial job cuts in its two main units, Maersk Line and Maersk Oil.