BofA Securities Downgrades DHL and Maersk

Investing.com — BofA Securities, in a note dated Thursday, downgraded shares of DHL (ETR:DHLn) Group and A.P. Moller-Maersk (CSE:MAERSKb) from a "buy" to a "neutral" rating. This signals cautious sentiment in the transportation and logistics sector as the companies face uncertain market conditions heading into 2025.

The downgrades reflect BofA analysts’ concerns about a challenging macroeconomic and operational environment.

DHL's Outlook

DHL’s downgrade comes amid expectations of subdued demand and a weakening German economy. BofA has revised Germany’s GDP growth forecasts downward, citing labor market pressures and deteriorating corporate health.

Despite the company’s shares trading below their historical average price-to-earnings ratio, analysts noted limited prospects for revaluation in the near term.

Maersk's Challenges

For Maersk, the downgrade is primarily attributed to concerns of oversupply in the ocean freight market. BofA forecasts a supply growth of 6% in 2025, potentially outpacing demand growth, which could lead to lower container freight rates later in the year.

The oversupply issue could be exacerbated by geopolitical factors, such as the reopening of the Red Sea shipping route, which would increase global shipping capacity.

While Maersk is expected to maintain robust cash returns, BofA anticipates challenges to its earnings performance as trade dynamics evolve.

Broader Sector Implications

The downgrades highlight broader themes impacting the transport sector, including tariff uncertainties and shifting e-commerce trends. BofA remains cautious about the outlook for freight and postal sectors, projecting slower volume growth and constrained pricing power.

However, analysts continue to favor stocks like DSV and InPost, which retain "buy" ratings, citing their resilience and growth potential in a competitive market.