Red Sea tensions pull shipping giant Maersk out of losses

The increase in tensions on the Red Sea route, which includes the Suez Canal, alters maritime trade, its prices and the volume of chartered containers. Attacks by Houthi rebels against the ships of major freight transport companies increase trade rates by affecting the route that moves one in every three containers in the world. But the threat of a collapse in global shipping traffic would allow even companies like Maersk to post losses in 2024.

Macroeconomic forecasts comprising the analysts’ consensus point to a slowdown in activity in economies such as Europe or the United States, indicating a decline in consumption and international trade. This affected profit estimates Listed Shipping Giants Like Danish Maersk or Evergreen. However, forecasts collected by FactSet over the past two weeks have shifted in favor of companies that move and charter sea freight, with sales and net profits rising.

“In the short term, maritime companies may benefit from the crisis, because increased demand for cargo Contributes to the increase in container prices,” explains Virginie Maisonneuve, head of equity investments at Allianz GI. “We expect that The freight recession will end this year“It’s more likely to happen by the end of the third quarter,” said Paul Brashear, vice president of ITS Logistics, a company in the region.

Maersk is the clear beneficiary of the struggle here, seeing as how experts have significantly improved their profit forecasts for 2024. In particular, investment companies They have stopped expecting losses this yearAs they estimated on average a few weeks ago, the Danish firm would achieve a net profit of more than 128 million euros (a negative net result of 1,050 million euros was expected three weeks ago).

And the same has happened with many of its global rivals in the region. Coscoshipping, Hapag-Lloyd, Evergreen Marine or its Danish compatriot DSV have seen how analysts have improved their profit forecasts for 2024 in just a few days since the beginning of the year. The most striking case, along with the prestigious Danish brand German transportation company Hapag-Lloyd Which exceeded the planned EUR 55 million forecast for the full year by EUR 570 million, almost 800% more than the net result.

“The situation is causing an increase in delivery times and rates as well as a reduction in freight supply, factors that are driving up stock prices of companies in the sector and which have led to Danish Maersk will skyrocket by more than 30% In a month, Novo Nordisk was ousted as the star value of the Copenhagen Stock Exchange,” explains Clément Inabona, fund manager at La Financière de l’Echiquier (LFDE) about the stock market consequences of conflicts in the Middle East.

Investors have eyed the stock market for this expected improvement in profitability, not only in the shipping companies themselves, but also in companies that are involved in the freight, logistics and freight insurance industries. For example, Maersk advanced more than 6% on the year That lifted the benchmark stock index on the trading floor and in Denmark until it became the only European index to remain in the green so far this year.

But a strong rebound remains pending in recent sessions There is no upside potential for most of these stocks, Market consensus gathered by FactSet sets the target price at 12,850 Danish crowns (1,733 euros per share at the exchange rate), which has already been exceeded last week. Hapag-Lloyd and Kuehne & Nagel are in the same position (although they are not exclusively dedicated to maritime transport). At this point, DSV, another Danish company focused on transportation and logistics, is the market leader by far at its exchange rate of up to 197.05 euros. Moreover, according to experts, this is the only product which is recommended for purchase.