Maersk: Stock of the Week

WATCH: Shipping giant's share price has risen and fallen on events in the Red Sea, but Morningstar analysts say Maersk stock is currently undervalued

Christopher Johnson 16 February, 2024 | 8:38AM
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Welcome to Stock of The Week. I'm Chris Johnson. 

Danish shipping giant Maersk (MAERSK B) reported a drop in full-year revenue down more than a third from 2022 levels and earnings before interest, tax, depreciation and amortisation down 75% last week Thursday. 

In its report Maersk said it would not benefit from disruption in the Red Sea, as Iran-backed Houthi militants attack commercial ships forcing the re-routing of vessels from the Red Sea to around the tip of South Africa, and that an oversupply of vessels would hit its earnings this year.  

Upon the news its shares dropped nearly 15% and the company has suspended its share buyback programme.  

Maersk has quickly fallen from grace, after it started the year as the best performing stock in the first week of 2024. 

However, Morningstar analysts say the stock is undervalued because of negativity baked into the share price, which comes in stark contrast to investor optimism for the wider shipping sector. 

Morningstar gives the stock a 4-star rating and a fair value estimate of its share price of £2,016.  

As of the thirteenth of February 2024 at 12 noon shares in Maersk are trading at £1,253.55.

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Christopher Johnson  is data journalist at Morningstar

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