Analysts Are Optimistic We'll See A Profit From MPC Container Ships ASA (OB:MPCC)

With the business potentially at an important milestone, we thought we'd take a closer look at MPC Container Ships ASA's (OB:MPCC) future prospects. MPC Container Ships ASA owns and operates a portfolio of container ships. The kr8.8b market-cap company posted a loss in its most recent financial year of US$64m and a latest trailing-twelve-month loss of US$21m shrinking the gap between loss and breakeven. As path to profitability is the topic on MPC Container Ships' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for MPC Container Ships

Consensus from 2 of the Norwegian Shipping analysts is that MPC Container Ships is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$148m in 2021. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 70% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of MPC Container Ships' upcoming projects, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with MPC Container Ships is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in MPC Container Ships' case is 64%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of MPC Container Ships which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at MPC Container Ships, take a look at MPC Container Ships' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is MPC Container Ships worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether MPC Container Ships is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MPC Container Ships’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.

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