We value Maersk using a 50/50 blend of price/book and EV/EBITDA. In both instances, we apply the lowest multiple seen across 2010-19, factoring in the market's likely scepticism towards the sector in the context of both a challenging supply outlook and demand concerns arising from ongoing geopolitical issues. Our target price is DKK11,093.

Certain industry- and company-specific risks could prevent Maersk from achieving our target price. Container shipping profits have historically been volatile, reflecting: the volume and pattern of trade; freight rates that are acutely sensitive to supply imbalances and to market share-driven strategies of competitors; and the volatility in bunker costs. Also in the port segment, risks include weaker pricing, non-renewal of material concessions and/or failure to win further concessions, capex overspend, and delays in scheduled expansion projects.


Upside risks to our target price being exceeded include: (1) an improvement in consumer confidence, i.e. higher than expected consumer demand, better supply and demand dynamics through short-term capacity management, resulting in a favorable freight rate environment; (2) Maersk continuing to win market share through integrated logistics offering resulting in lower-than-expected earnings volatility; (3) congestion and tight supply chain conditions continuing into 2023 despite weak demand; and (4) in the port segment, risks include better pricing and better synergies within the ocean segment.