First Read: A.P. Moller-Maersk "FY 26 profit upgrade" (Neutral) Nedelcu

Research evidence excerpt

First Read: A.P. Moller-Maersk "FY 26 profit upgrade" (Neutral) Nedelcu

Forecast returns

Forecast price appreciation -2.5%

Forecast dividend yield 2.6%

Forecast stock return 0.1%

Market return assumption 7.4%

Forecast excess return -7.3%

Company Description

A.P. Moller-Maersk A/S is an integrated transport and logistics company operating in >120

countries, employing >80,000 people. Ocean represents 70% of group revenue; Maersk is

the largest ocean carrier in the world by capacity (17% market share). Terminals & Towage

operates gateway terminals involving landside activities, and towage services under the

Svitzer brand. Maersk's strategy is to become a global integrator of container logistics

creating a portfolio of end-to-end products, with a focus on its Logistics & Services business.

Manufacturing & Others includes the production and sale of reefer containers.

Valuation Method and Risk Statement

Our estimates which play an important role in our valuation and stock price targets are

subject to a high degree of error. The forecast error is primarily driven by revenue volatility, a

function of unpredictable ordering of capacity or unforeseen demand factors impacting

freight rates, combined with significant operating leverage. Ocean container volumes can be

meaningfully impacted by economic recessions. Cyber-attacks have historically targeted

ocean carriers (including Maersk) with consequences in terms of increased cost and

headwinds to the capacity of serve clients. Maersk has exposure to developing countries via

its Terminal business leaving its operations exposed to political instability. Increased emphasis

globally on emissions reductions could lead to incremental costs for the company to comply

with regulation which may not be fully passed through to customers.