Source: Trade Winds News
September 14th 2015
Analyst Frode Morkedal also hiked his target price from DKK 10,920 ($1,655) to DKK 13,800 per share on the back of positive messages spelt out to investors last week.
“The growth message at last week’s Capital Markets Day was loud and clear and we see this as a unique opportunity for the group to take advantage of its competitive positioning, particularly for Maersk Oil,” Morkedal wrote.
“Maersk is under-leveraged and $10bn investments at 10% return on invested capital would add at least 25% to earnings per share, in our view.”
“We believe Maersk is a very good risk/reward bet on a revival of energy and maritime activities.”
Morkedal says Maersk’s strategy is to grow in a disciplined way with Maersk Oil mentioned at the capital markets day to be targeting mergers and acquisitions.
“Price ideas are still too high but Maersk Oil has time to wait,” Morkedal wrote.
“A continued weak oil price environment over the next few years could thus be positive for investments opportunities.”
“On the other hand, if oil prices recover faster than expected, then earnings contribution from Maersk Oil would be higher than the essentially zero level now. Win-win in our view.”