At kr.12,860, Is A.P. Møller - Mærsk A/S (CPH:MAERSK B) Worth Looking At Closely?

A.P. Møller - Mærsk A/S (CPH:MAERSK B) saw a significant share price rise of 45% in the past couple of months on the CPSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. However, investors should consider that the recent spin-off may be playing a role in the current share price changes With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine A.P. Møller - Mærsk’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for A.P. Møller - Mærsk

What Is A.P. Møller - Mærsk Worth?

A.P. Møller - Mærsk is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 17.02x is currently well-above the industry average of 7.34x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Since A.P. Møller - Mærsk’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will A.P. Møller - Mærsk generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for A.P. Møller - Mærsk, at least in the near future.

What This Means For You

Are you a shareholder? If you believe MAERSK B is currently trading above its peers, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MAERSK B for some time, now may not be the best time to enter into the stock. Its price has risen beyond its industry peers, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 3 warning signs for A.P. Møller - Mærsk (1 is a bit concerning!) and we strongly recommend you look at these before investing.

If you are no longer interested in A.P. Møller - Mærsk, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com