We initiate on MATX at Hold with a $116 PT. Matson, Inc. is a leading ocean transport and logistics provider serving the U.S. mainland–Hawaii trade, Alaska, Guam, China, and select Pacific markets.
Despite protected domestic routes insulating MATX from the global shipping whipsaw, a structural reset in China core routes represents a meaningful break from the past 3 years' volatility. Disconnect between the recent market euphoria and real-world operating pressure is laid bare as management now guides to "meaningful lower" rates and double-digit China volume decay since April without near-term relief in sight.
Against consensus FY25E EBITDA recovery to $921mn, our $625mn forecasts -14% declines, steep international freight rate weakness, and muted SSAT/broader logistics platform contribution. While market consensus increasingly positions MATX for a v-shaped recovery, even a modest FY26E $673mn EBITDA rebound leaves MATX well below pre-correction earning power and short of consensus.
We believe 5.6x EV/EBITDA discounts not only S/D headwinds but also counter-cyclical tailwinds to lucrative Jones Act markets and the relatively stable economics of Hawaii/Alaska lanes, justifying 6.5x FY26E. As global supply chain frictions and localized infrastructure spend remain, [10-K Based Recommendation] our blended implied equity value and PT provide 1% upside in 1.5 years (0.5% annualized), below our threshold for Buy and reflective of a downcycle we expect to persist – any more acute shift in consumer or freight normalization would merely change the timing but is not our base case.
MATX equity offers downside protection anchored by domestic stability and no near-term reward as consensus resets and cycle grinds on.