JPM navigates through 'stormy seas and cloudy skies' ahead of European transport stocks in 2023

Zim Integrated Shipping Services

15/12/2022 12:39

** In a note on European transport sector, J.P.Morgan says
its expects divergent trends between the logistics and air
travel sectors in 2023  
   ** The logistics sector is clearly undergoing a destocking
cycle, with a severe impact on freight rates, it says
        ** The brokerage expects the rate pressure which started
in sea to spread to air in 2023 
        ** It adds, however, that if consumer spending weakens
less than expected, there could be a rebound in volume and rates
later in 2023
    ** On air travel it says that Q4 might see a continuation of
the strong passenger demand seen in Q3 but expects this trend to
slow in H1 2023
    ** Among logistic stocks JPM's top picks are Denmark's DSV
 DSV.CO  and British ship broker Clarkson  CKN.L  
    ** It ups rating on Clarkson to "overweight" from "neutral"
given its higher exposure to tanker and dry bulk rates rather
than containers'
    ** Its least preferred logistics name is Hapag-Lloyd
 HLAG.DE  ("underweight") with its relatively high exposure to
freight rates 
    ** Among airlines JPM's top picks are Ryanair  RYA.I  and WH
Smith  SMWH.L , with the first one best positioned for
macro-uncertainty in airlines
    ** It also highlights Lufthansa  LHAG.DE  ("overweight")
with the "cleanest" equity story in its coverage
    ** The broker's least preferred picks within airlines are
easyJet  EZJ.L  ("underweight") and Air France-KLM  AIRF.PA 
("neutral")
 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))