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Investing.com - Goldman Sachs initiated coverage on Mitsui OSK Lines Ltd. (9104:JP) (OTC:MSLOF) with a Buy rating and a price target of JPY6,300.00 on Tuesday.
The investment bank highlighted Mitsui OSK’s profit generation capabilities outside of the container shipping business as a key factor in its positive outlook, particularly given the potential decline in container shipping market conditions expected in the second half of 2025.
Goldman Sachs noted that Mitsui OSK has the lowest contribution to recurring profits from joint-venture ONE among the three Japanese shipping companies, and is front-loading capital expenditures, including mergers and acquisitions, during its current medium-term plan running from fiscal year 2024 through fiscal year 2026.
The firm acknowledged that Mitsui OSK stock has underperformed compared to competitors NYK and K-Line due to initial dividend guidance showing a significant year-over-year decrease at fiscal year 2025 results, but expects upside to what it views as conservative net profit guidance.
Goldman Sachs also pointed to approximately JPY600 billion in unrealized gains on domestic real estate held by Daibiru, suggesting that steps to realize these gains could lead to a market re-rating for Mitsui OSK shares.
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