Should You Think About Buying A.P. Møller - Mærsk A/S (CPH:MAERSK B) Now?

Today we're going to take a look at the well-established A.P. Møller - Mærsk A/S (CPH:MAERSK B). The company's stock received a lot of attention from a substantial price increase on the CPSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine A.P. Møller - Mærsk’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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Is A.P. Møller - Mærsk Still Cheap?

Great news for investors – A.P. Møller - Mærsk is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that A.P. Møller - Mærsk’s ratio of 3.98x is below its peer average of 6.67x, which indicates the stock is trading at a lower price compared to the Shipping industry. What’s more interesting is that, A.P. Møller - Mærsk’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

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

Can we expect growth from A.P. Møller - Mærsk?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Though in the case of A.P. Møller - Mærsk, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although MAERSK B is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to MAERSK B, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on MAERSK B for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 3 warning signs for A.P. Møller - Mærsk (1 can't be ignored!) that we believe deserve your full attention.

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.

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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.