JPM sees weak profit trends for freight, container shipping in 2024

Scorpio Tankers

07/12/2023 14:44

** J.P.Morgan sees downward profit trends for the freight
and container shipping sector, while oil tankers will enjoy a
continued strong environment in 2024
    ** JPM notes global freight volumes are in line with 2019
levels despite real GDP being 10% higher, which means there is
scope for volume recovery
    ** However, weak rates will likely offset benefits from
growing volumes in sea freight, while air freight might be
slightly better, it says
    ** Freight forwarders have seen their profits normalise in
past 18 months, with Q4 likely to be the worst quarter in 2023
for profitability, JPM says; it expects profit decline to
continue in 2024
    ** The broker's top picks are Scorpio Tankers  STNG.N  for
shipping and Clarkson  CKN.L  for logistics, both rated
"overweight"
    ** It prefers DSV  DSV.CO  ("overweight") over Kuehne und
Nagel  KNIN.S  ("underweight") among freight forwarders
    ** JPM upgrades Deutsche Post  DHLn.DE  to "neutral" from
"underweight", saying its DHL Express unit should benefit from
restocking faster than the freight forwarding business

 (Reporting by Eva Orsolya Papp)
 ((Evaorsolya.Papp@thomsonreuters.com))