In major news on German stocks, Hapag-Lloyd AG (DE:HLAG) shares gained over 6% as of writing after the company upgraded its earnings forecast for 2024, driven by higher shipping demand and short-term freight rates. The company now expects its EBITDA (earnings before interest, depreciation, and amortization) to be between €3.2 billion and €4.2 billion as compared to the previous guidance range of €2 billion and €3 billion.
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Hapag-Lloyd is a leading provider of container shipping and logistics services.
Hapag-Lloyd’s First Half Performance
Hapag-Lloyd reported preliminary numbers for the first half, highlighting better-than-expected demand. In the first half, the company reported an EBITDA of approximately €1.8 billion, compared to €3.5 billion recorded in the same period last year. Moreover, EBIT (earnings before interest and tax) was down to €0.8 billion from €2.6 billion in H1 2023.
Despite the decline, Hapag-Lloyd anticipates that its second-half earnings will surpass previous forecasts, supporting the full-year earnings momentum.
Meanwhile, Hapag-Lloyd stated that the forecast remains highly uncertain, given the volatile nature of freight rates and geopolitical pressures. Last year, the company faced challenges due to lower freight rates resulting from the normalization of global supply chains. Additionally, the conflict in the Red Sea reduced transport volumes by rerouting ships, causing longer shipping times.
Is Hapag-Lloyd a Good Stock to Buy?
In terms of share price growth, analysts have maintained a bearish view. Today, analysts from UBS and Warburg Research reiterated their Sell ratings, predicting a downside of 35% and 29%, respectively.
As per the consensus rating on TipRanks, HLAG stock has received a Strong Sell rating, supported by nine Sell and two Hold recommendations. The Hapag-Lloyd share price forecast stands at €120.64, implying a downside of 26.03% from the current level.
