It has been a very bad start to the year to Danish giant AP Moller-Maersk’s share price, dropping more than at any other time in the past two decades. And analysts are predicting worse is to come.
Maersk’s stock lost 9.8% in the first week of 2016, its worse start to a year since at least 1992, according to Bloomberg.
A report out by Nordea analyst Stig Frederiksen says Maersk is being hit “by a toxic cocktail with challenges in both the oil and the container division, [but] it’s now become the oil price that’s the main driver.”
Maersk Oil, which mainly explores in Qatar and in the North Sea, has set its breakeven level at around $55per barrel, considerably higher than today’s price and indeed the average forecast price by readers of this site for the year ahead.
Maersk shares will probably be driven by the price of oil “for a while,” the Nordea analyst predicted.
Frederiksen did however maintain that Maersk Line, the world’s largest containerline, would stay in the black this year.
Sensing stormy conditions ahead, Maersk announced swingeing cuts across the whole group last October including 4,000 redundancies at its containerline.