BofA Hikes Shipping Forecasts by $1.2B on Mideast Supply Crunch
Bank of America Securities has increased its 2026 financial forecasts for the container shipping industry, anticipating sustained short-term supply tightness. The bank attributes this to the volatile situation in the Middle East and delays in reopening the Red Sea shipping lane, which has tightened vessel availability. As a result, BofA lifted its average net profit forecast for the sector by $1.2 billion and raised its average target price for shipping stocks by 15%.
The revised targets include specific upgrades for major operators. The target price for COSCO SHIP HOLD (01919.HK) was increased from HKD11.5 to HKD13.5. Its mainland-listed counterpart, COSCO SHIPPING (601919.SH), saw its target rise from RMB13.5 to RMB16. Similarly, Orient Overseas (International) Limited (OOIL, 00316.HK) had its target price lifted from HKD100 to HKD119.
Valuations at 10% Discount to Crisis Peak Signal Caution
Despite the positive short-term revisions, BofA Securities maintains a broadly negative outlook on the container shipping sector, keeping its "Underperform" ratings on the aforementioned stocks. The bank's analysts argue that the current disruption provides significantly less financial benefit than the supply chain chaos experienced during the pandemic or the peak of the earlier Red Sea crisis.
This bearish long-term view is anchored in valuation concerns. BofA notes that current price-to-book value (PBV) multiples are only at a 10% discount compared to the peak of the Red Sea crisis. The bank believes this premium is unjustified given the smaller scale of the current benefits and its forecast for a general decline in earnings per share (EPS) and dividends across the industry this year.
Edgen Stock·Mar 17 2026, 08:09
