Dresdner Kleinwort Wasserstein said on Wednesday it was cutting its recommendation on P&O (Peninsular & Oriental Steam Navigation Company Plc
) to reduce from hold and had a price target of 240 pence a share.
A research note said a recent visit to P&O Ports discovered that new project start-ups were proceeding apace and underlying volume growth was still healthy, although the market rate had fallen as world trade had slowed.
Slower growth should prove challenging to P&O Nedlloyd
as container shipping capacity is set to grow 12.5 percent this year and 11 percent next year.
"Utilization will come under pressure and freight rates are likely to fall. It is largely a question of the timing and order of magnitude," the note said.