Trump’s Latest Tariffs Announcement Sends Shippers’ Shares Lower, but We Think It Is an Overreaction

This analysis was originally published as a stock note by Morningstar Equity Research.

President Donald Trump announced sweeping tariffs on all imports and additional levies on major trading partners, sending shares of global shippers Maersk and Hapag-Lloyd down 7% and 8%, respectively, in early trading. Given our previous reductions in fair value estimates and our belief that the market is overreacting to these tariffs, we are making no change to our fair value estimates.

As we discussed in our November 2024 note, tariffs did not harm these companies during Trump’s first presidency. Maersk and Hapag-Lloyd saw volumes grow 12% in 2018 and 2019, as their position as the largest carriers let them adapt to the changing flow of global goods and associated changes in routes, coming out the other side in a stronger position.

Nonetheless, the increased risk of future tariffs and associated reduction in trade demand is a greater risk following the recent news. So far this year, we have reduced Maersk and Hapag-Lloyd’s fair value estimates by 8% and 15%, respectively, on account of the tariffs, but this is still less than the 12% and 20% reductions by the market.