Stanley cuts DP World price target
Dubai, June 8, 2009
Morgan Stanley slashed its price target on Dubai-based port operator DP World by 59 per cent, saying the market is underestimating the depth and duration of the container port downturn, particularly in the Middle East.
"Also, given that the UAE economy has slowed later than the rest of the world, we think the destocking phase, and hence recovery in volumes at Jebel Ali, will lag global ports," Morgan Stanley said.
A recovery in the global economy may be imminent but is likely to be "tenuous and slow," according to Morgan Stanley's economics team.
Morgan Stanley cut its price target on DP World stock to 32 cents from 78 cents, but kept an "underweight" rating.
"A faster-than-anticipated recovery in global growth and Jebel Ali throughput remaining resilient would make us more positive on the shares," Morgan Stanley said. Shares of DP World were down more than a percent at 36.5 cents Monday in Dubai.-Reuters