Hapag-Lloyd Aktiengesellschaft (HLAG.DE), mcap=€47.8bn, price €272 vs €445

Short pitch:
– A bet that the shipping industry cycle has already peaked and will revert in the mid-term driven by: (1) new ships entering the market, (2) release of currently port-congested capacity, and (3) unwinding of the pandemic-era spike in demand.
– Just as the pandemic created an unprecedented supply shortage, the reverse could take hold as it unwinds.
– HLAG trades at a huge premium to peers or cyclically-adjusted long-term multiples.

– HLAG currently trades at <5x EV/EBITDA of 2022 guidance and <7x consensus P/E.
– This represents a 100-200%+ premium to peers.
– Pre-crisis, HLAG traded closer to ~7-7.5x EBITDA on average.
– 2023-24 numbers are expected to look more like 2019/2020.
– On 2020 earnings HLAG trades at 26x EBITDA or ~70x earnings, and on the pre-crisis (2019) base it reaches >35x EBITDA or >200x P/E.

Exp. gain: 65% to $150/share, using historical multiples and assuming profitability returns to 2020 levels.

Full HLAG write-up:


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