Tariffs make life harder for world’s largest shipping company

A. P. Møller-Mærsk may struggle to make a profit this year after the US and China descended into a trade war that will probably hurt the shipping company.

Mærsk has already taken some losses this year; now investors gird themselves for more bad news. Trade protectionism means less demand and history suggests the shipping industry will struggle to make the necessary supply cuts.

Per Hansen, an Copenhagen investment economist, says Mærsk is currently “in the eye of the hurricane” when it comes to the damage that will be inflicted by a trade war. He estimates the company’s shares could drop at least 10 percent.

Mærsk is already bracing itself for lacklustre demand in the second half of the year, due to what it says are seasonal effects. The company said earlier in the week it will need to temporarily scale back its service between Asia and North Europe as a result.

A number of analysts have cut their outlook on Mærsk recently. Even so, of the 28 analysts covering Mærsk, only one is recommending that clients sell the stock. The rest advise either buying or holding on to Mærsk shares, according to data compiled by Bloomberg.

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