JPMorgan downgrades Clarkson to 'neutral'

JPMorgan Cazenove downgraded its stance on shipping services company Clarkson to ‘neutral’ from ‘overweight’ as it took a look at the European logistics sector.

JPM said the downgrade mainly reflects a lack of catalysts, ongoing optically high valuation and difficult near-term comparatives.

"Our forecasts are upgraded 5% for FY20 and downgraded circa 7% thereafter, reflecting a combination of weaker freight rates and the stronger GBP, which is a transactional headwind for Clarkson," it said.

JPMorgan also lifted its price target to 2,960p from 2,920p.

In the same note, it recommended Maersk and Royal Mail as its top picks.

JPM said Royal Mail's trading has benefitted materially from stronger parcel volume, improving the medium term revenue outlook. "The recent union agreement has also removed a major overhang," it said, adding that the UK business currently being valued at around 3-4x EBIT "seems harsh".

At 1040 GMT, Clarkson shares were down 2.9% at 2,791.96p, while Royal Mail was up 1.1% at 357.90p.