EQUITY RESEARCH: A.P. MØLLER – MAERSK A/S

A.P. Møller – Mærsk A/S (“MAERSK”) is a global container shipping company that operates worldwide with an integrated services model throughout 4 segments: Ocean, Logistics & Services, Terminals & Towage and Manufacturing & Others. MAERSK owns and operates some of its own ports and terminals as well as provides a complete supply chain management experience to its clients through air freight and intermodal services. Looking forward, MAERSK expects to increase its capabilities within its Logistics & Services segment as well as expand its port and terminal locations. As of 2022, MAERSK is the largest listed logistics company with US$61.8 billion in revenues and US$72.2 billion in assets and the 2nd largest in total TEU carried. MAERSK has a “BUY” recommendation with a 2022YE price target of US$3,928.75, representing a 26.81% upside potential or a 37.71% potential annualized return against the stock price on April 4th 2022 of US$3,098.04. Nevertheless, the stock carries high risk due to its sensitivity towards macroeconomic events and the business cycle. Particularly in the past years, the macroeconomic outlook has been exceptionally uncertain regarding demand for goods relative to services, freight rates, oil prices and other main drivers of valuation for MAERSK. MAERSK’s undervaluation can be explained by the market’s pessimism towards the evolution of such drivers. However, the company experienced a record year in 2021, raising revenues by 55% and EBITDA by 192% which allowed it to raise cash for investment in its strategic plans which include several acquisitions, increase dividends by 112% and announce a large 4-year share buyback program. 2022 is forecasted to be as successful, if not better, than 2021 given the current global outlook, with an already announced 642% increase in dividends and the start of the DKK 64 billion share buyback program.