Canaccord Genuity initiates coverage on Clarkson at 'buy'

Analysts at Canaccord Genuity initiated coverage on shipping services firm Clarkson with a 'buy' rating and 4,040.0p target price on Thursday, citing both "progress and profit".

Canaccord Genuity thinks maritime markets face "choppy prospects", but added that structural factors were seeing maritime tonne-miles travelled expanding.

It also said propulsion decarbonisation and higher cost of finance meant limited new shipbuilding, implying "a firm rate environment" in most maritime segments into 2023 – and through to 2030, potentially.

"The 'so what?' is that Clarksons looks set to reap the reward of higher market rates, while lower volumes and improving IT efficiency suggest gross broking profit per employee might rise (faster than in a high-volume-led-growth market), which we think will help support margins, profits, and dividends," said Canaccord.

The Canadian bank also reckons the shares offer scope for roughly 12% total shareholder return without multiple re-rating due to cash and dividend generation.

Reporting by Iain Gilbert at Sharecast.com