As shipping rates approach normalization, high-PER stocks risk street forecast-cutting. Hence, we have shifted down our sector call and the ratings for some of the Logistics stocks under coverage. JWD is now our top pick. Our investment horizon rolls over to YE23.
Shipping rates are approaching normalization
The ongoing geopolitical crisis, tight monetary policies, China’s slowing economy, and increasing supply (easing port congestion) are squeezing dry bulk shipping rates. We expect PSL’s 3Q22 core earnings to decline YoY and QoQ; its 4Q22 core profit looks set weaken YoY but rise QoQ.