GK Goh Securities has downgraded Neptune Orient Lines (NOL), the world's sixth largest container shipper, to hold from buy due to the economic slowdown that is expected to hurt capacity levels and dent earnings.
"The expected pick-up in summer shipping activity does not appear to be coming through," an analyst said in a recent report.
"Capacity utilization is now under pressure, reversing a two-year trend of container trade growth outpacing capacity expansion."
Although NOL remained undervalued compared with its peers, analysts said high utilization - a major factor driving its profits - was expected to come off as liners cut rates to fill ships.
Earnings per share were projected at $.07 for fiscal year 2001 and $.05 for 2002, down 58 percent and 70 percent respectively.