Shares of Global Shippers Maersk and Hapag-Lloyd Rise on US-China Tariff Pause
If the two countries can make a deal in the next 90 days, it would be a significant tailwind for shipping volume.
Over the weekend, China and the United States agreed to a 90-day pause on tariffs. Maersk AMKAF CEO Vincent Clerc calls this a step in the right direction. Shares of Maersk and Hapag-Lloyd HLAGF were up over 10% on May 12 trading.
Why it matters: US-China cargo volume plunged in April. Furthermore, in its earnings release last week, Maersk introduced a volume downside to its guidance, another indicator of weakness in volume. If the two countries can make a deal in the next 90 days, it would be a significant tailwind for shipping volume.
- The shippers’ shares have almost returned to their prices prior to President Donald Trump’s initial tariff announcement, a sign that the market anticipates a resolution past the current 90-day pause.
The bottom line: Given the uncertainty of tariff policy, we make no changes to our no-moat ratings and maintain our fair value estimates for the two firms. If a longer-term deal is struck or there is other news, we will adjust our estimates accordingly.
Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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