Clear Skies as DSV Moves Into 2022

Narrow-moat DSV recorded a bumper year in 2021, and while its numbers were somewhat clouded by the acquisition of Agility GIL during the year, the trends in shipping markets were clear to see. DSV has taken full advantage of tight capacity, particularly in sea freight, to extract higher commissions from clients who are desperate to ensure delivery of timely shipments. Although shipping giant Maersk commented this morning about shipping markets normalising early in the second half of the year, we believe this will take time to filter through to end clients. As such, having recently updated our near-term estimates, we are comfortable with our position close to the bottom of DSV’s updated guidance range for 2022 of between DKK 18,000 million and DKK 20,000 million in EBIT. We reiterate our DKK 1,120 fair value estimate and believe the shares are moderately overvalued.