DNB Markets has cut the target share prices of Wallenius Wilhelmsen and Hoegh Autoliners as it sees weaker car carrier rates.
“We foresee increasing risks to continued demand growth on headwinds for Chinese export growth, while facing a hefty delivery schedule,” analyst Jorgen Lian said in a note.
“Add to this the potential return to Red Sea transits, and we find rates should be under pressure and inevitably deteriorate the earnings potential for our covered companies
“But attractive backlogs secure sizable value in near-term cash flows, offsetting much of the risk,” he added.