Investors that have held onto their Maersk shares since a February low in 2016 are now 24% richer as the outlook starts to change in the shipping industry, despite previous warnings of a ‘perfect storm’, according to Bloomberg.
Of the 29 Analysts covering Maersk stock, 17 advise buying stocks while the other eight believe that holding onto existing shares is a good decision.
Frans Hoyer, an Analyst at Jyske Bank A/S, said: “I believe container lines will start acting more responsibly and not compete so fiercely on rates after adapting to the new situation of low growth.
“Looking at the rest of the year, I believe we’re facing a gradual recovery in container line profitability, which could support the Maersk share. That’s also one of the reasons we’re positive on the stock.”
PTI previously reported on how the shipping industry was set to enter a ‘perfect storm’ as a result of overcapacity, low freight rates and the slump in global demand.
However, Maersk’s recent financial results showed that carriers can profit in a tough climate, after its shipping arm Maersk Line made a US$32 million profit in Q1, 2016.
The recent wave of alliances is symbolic of the choppy market waters that are causing shipping lines to sell off assets and attempt to remain competitive.
