Investing.com — Barclays downgraded A.P. Moller-Maersk to Underweight from Equal Weight and slashed its price target to 17,500 Danish kroner from 25,000, saying the risk-reward has turned negative as higher investment needs weigh on free cash flow.
The change is “less about near-term earnings, which remain supported, and more about medium-term risk-reward,” analyst Marco Limite wrote.
Maersk shares dipped 3.5% in Copenhagen trading.
Limite gave five reasons for the downgrade. First, management said at the third quarter that “there are more opportunities today to reinvest into the business than there was just a few years ago,” pointing to capex above the roughly $5 billion historical average. Lease costs should also rise in 2027, with the existing fleet at about 95% utilization, and from 2028 up to 70% of vessel delivery capex is paid in the year of delivery.
Second, buybacks have moved down the capital allocation list. A larger buyback had been one of Barclays’ positive catalysts, but with capex needs rising and balance sheet flexibility a priority, Limite sees a lower chance of meaningful support.
Third, 2026 tailwinds from strong demand and supply congestion could normalize in 2027, putting pressure on rates. Limite said strong Chinese exports, driven by AI, electric vehicles and green technology, could be hit by AI-related regulation and potential EU-China trade barriers.
Fourth, investor expectations already seem to reflect a solid 2027, with only a modest earnings decline. Barclays forecasts 2027 EBITDA of $12.5 billion, $1.5 billion below 2026, and sees no significant upside risk.
Fifth, the 2028 earnings trough is moving into view. Newbuild deliveries add about 10% to industry capacity in 2027, which looks manageable, but a further 17% in 2028 “will be much harder to absorb,” the analyst wrote.
Barclays modeled 2028 EBITDA of $7.5 billion, with the average freight rate falling to about $2,000 per container by the fourth quarter of 2028. Limite said the market is likely to price in the downturn well before the trough.
