Matson, Inc. (MATX): what the price assumes

In the published model solve dated 2026-Q2, anchored at $199.87, Matson, Inc. (MATX) is priced for +8.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/MATX

Headline

FieldValue
TickerMATX
CompanyMatson, Inc.
Current price$199.87/sh
CompositionOcean Transportation services 81% / Terminal and other related services 0% / Fuel sales 0% / Transportation Brokerage and Freight Forwarding services 16% / Warehousing services 1% / Supply Chain Management services 1%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)8.2%
Operating margin today14.4%
Margin compression (value-band)-6.2pp
Implied growth8.8%
Multiple paid14x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.9pp.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.27σ
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and relative-multiple value, while earnings-power/growth-DCF land below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.22x5expensive
Earnings4.05x5expensive
Relative0.92x3justifies
Growth1.65x3expensive

Families that justify the price: Asset, Relative Families that call it expensive: Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$55.883.58xyesFCF base $0.2B, growth -4% (input: historical growth), terminal g 0.5%, WACC 8.3%, 5yr projection
DCF Exit MultipleGrowth$183.281.09xyesExit EV/EBITDA: 12.1x / 14.1x / 16.1x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$226.020.88xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.9x / 20.0x / 23.1x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$151.601.32xyesBV/sh $89.22, ROE (TTM) 15.7%, ke 9.3%
Two-Stage Excess ReturnAsset$195.141.02xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$120.941.65xyesRev $3.3B, growth -4% (input: historical growth; tapered), Terminal P/S: 1.6x / 1.8x / 2.1x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$259.270.77xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.78B × (1−17%) / WACC 8.3% → EPV (no growth)
Residual IncomeAsset$198.931.00xyesBV $89.22 + 5yr PV of (ROE (TTM) 15.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$164.501.22xyes√(22.5 × EPS $13.48 × BVPS $89.22) — Graham's conservative floor
EV/EBITDA RelativeRelative$182.431.10xyesEBITDA $0.48B × sector EV/EBITDA 13.0x
FCF YieldEarnings$49.414.05xyesFCF $199.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$41.494.82xyesSBC-adj FCF $0.18B (FCF $0.20B − SBC $0.02B) capitalized at Kₑ
Ben Graham FormulaEarnings$11.3017.69xyesEPS $13.48 × (8.5 + 2×-5.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$16.3712.21xyesBV $89.22 × (ROIC 1.5% / WACC 8.3%)
P/Sales SectorRelative$217.010.92xyesRevenue $3.32B × sector P/S 2.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$145.731.37xyesEPS $13.48 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$290.7m
Net debt / NOPAT (after-tax)0.73x
Net debt / operating income (pre-tax)0.61x
Interest coverage71.5x
Share count CAGR (buyback)-7.2%
Burning cashno

Bullet Takeaways

Two different businesses sit inside Matson. The Jones Act domestic trades to Hawaii and Alaska are a protected, steady franchise; the expedited China service is high-margin but volatile, and it is normalizing from a boom.

Q1 2026 showed the swing: net income fell to $56.6 million from $72.3 million as China volumes dropped 9.5%, yet management raised full-year guidance on stronger expected China demand through peak season.

The balance sheet is conservative but a capex cycle is coming. Net debt is just $291 million with interest coverage above 70 times, while three new vessels are due in 2027 and 2028, with construction largely funded by a dedicated Capital Construction Fund.

Bull Case

Lead with the obvious risk: Matson's recent earnings have leaned heavily on its expedited China service, and that lane is cyclical and politically exposed. China container volumes fell 9.5% year over year in Q1 2026, ocean transportation operating income dropped to $54.6 million from $73.6 million, and total net income fell to $56.6 million from $72.3 million. If the worry is that the China boom is over and Matson reverts to a low-growth domestic shipper, that worry is grounded in the quarter's numbers. The question is whether the data actually supports a permanent reset or a normal cyclical breath.

The data points to normalization, not collapse, and management leaned into that read by raising guidance. Despite the soft quarter, Matson expects 2026 ocean transportation and consolidated operating income to modestly exceed 2025, with the ocean segment now guided roughly $20 million above the $98.6 million it posted in 2025, crediting improving yields on Shanghai sailings and stronger China trade lanes. A more stable Transpacific environment helped, following the US-China trade deal and a suspension of port entry fees, and the February 2026 Supreme Court action that halted collection of certain tariffs reduced uncertainty. The seasonal pattern the company describes in its 10-K is intact: in the China trade, "volume demand is generally stronger in the second and third" quarters (FY2025 10-K, accession 0001104659-26-020944), so a soft pre-Lunar-New-Year first quarter is normal.

The domestic franchise is the durable floor under the volatile China lane. Matson's Hawaii and Alaska trades are protected by the Jones Act, which requires goods moved between US ports to travel on US-built, US-flagged, US-crewed vessels. The 10-K spells out the moat's value by describing the threat to it: if the Jones Act were "invalidated, substantially amended or waived," competitors could enter "the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign-built vessels" (FY2025 10-K, accession 0001104659-26-020944). That barrier is why the domestic business is steady and high-return. Pair a protected domestic base with a high-margin China optionality, a 14.4% operating margin, interest coverage above 70 times, and a buyback that has retired roughly a third of the shares since 2021, and the China softness looks like a cyclical dip in an otherwise well-defended compounder.

Bear Case

The structural fragility here is not leverage, where Matson is conservative, it is the concentration of profit in a single volatile, exogenous lane and the capital cycle now arriving on top of it. A large share of recent operating income has come from the expedited China service, a business whose economics depend on Transpacific freight rates, e-commerce demand, and US-China trade policy, none of which Matson controls. The Q1 2026 print showed how fast it swings: China volumes down 9.5%, ocean transportation operating income down 25%, and Transpacific West Coast spot rates falling 14% over a recent four-week stretch. A company whose earnings rise and fall with a politically charged trade lane is structurally exposed in a way a clean balance sheet does not fix.

The capital cycle compounds the timing risk. Matson is building three new Aloha-class vessels, with the 10-K confirming "expected delivery dates during the first quarter 2027, the third quarter 2027 and the second quarter 2028" (FY2025 10-K, accession 0001104659-26-020944), against total new-vessel construction spending around $400 million plus other capex of $150 million to $170 million and roughly $45 million of dry-docking. Even though about 92% of remaining milestone payments are covered by the Capital Construction Fund, a major fleet investment landing as the China lane normalizes means free cash flow is committed to steel at exactly the moment the high-margin revenue stream is cooling. That is the classic shipping trap: spend into the peak, deliver into the trough.

The valuation leaves little room for the cyclicality. At $191.35 (June 27, 2026) the earnings-power and growth-DCF families both read the stock as expensive, with only asset-based and relative-multiple support, and the blended X-ray figure sits near $176.8, below the price. The priced-in assumption is about 13.3% operating-income growth, a demanding bar for a business whose largest profit engine just shrank and whose domestic trades grow slowly. The 10-K is candid that earnings "have tended to follow a similar pattern, offset by periodic vessel dry-docking and other episodic cost factors, which can lead to earnings variability" (FY2025 10-K, accession 0001104659-26-020944). The buyback that has supported per-share value relies on the China lane's cash; if that lane stays soft while the capex bill comes due, the support thins and the cyclicality shows through.

Valuation

Matson is valued as a steady shipper with a cyclical kicker, and the methods split on whether the kicker is durable. Against the $191.35 price, the asset-based and relative-multiple families support the price, while the earnings-power and growth-DCF families read it as expensive, and the blended X-ray figure across five methods lands near $176.8, modestly below the quote. The priced-in characterization is within range and value and asset-supported rather than a growth bet, which fits an asset-heavy ocean carrier whose tangible fleet anchors the value.

The priced-in math is the tension. The embedded assumption is roughly 13.3% operating-income growth against a current operating margin of 14.4% and an implied terminal margin near 8.3%. That 13.3% growth bar is demanding for a company whose China lane, the recent growth driver, just contracted, and it is the assumption that the earnings-power method declines to underwrite. The valuation leans on the asset base and peer multiples rather than on aggressive forward growth; the filings confirm the asset quality and the Jones Act protection that supports the domestic trades (FY2025 10-K, accession 0001104659-26-020944).

The balance sheet is a genuine strength. Net debt of about $291 million sits at well under one times operating income, and interest coverage above 70 times is exceptional, so there is no solvency concern even with the coming fleet capex, much of which the Capital Construction Fund covers. The honest read is that the price is full but not stretched: asset value and peer comparisons hold it up, but the growth assumption embedded in it requires the China lane to recover, which management's raised guidance bets on. An investor here is underwriting that the protected domestic franchise plus a recovering China service justifies a price slightly above the blended methods, with the conservative balance sheet and aggressive buyback as the cushions and the China cyclicality and capex cycle as the risks.

Catalysts

Q1 2026 results (reported April 2026) were soft but accompanied by a guidance raise. Net income fell to $56.6 million, or $1.85 per diluted share, on revenue of $757.8 million, down from $72.3 million and $782.0 million a year earlier, as China container volumes dropped 9.5% ahead of Lunar New Year and ocean transportation operating income fell to $54.6 million from $73.6 million. Despite the weak quarter, management raised full-year 2026 guidance, now expecting ocean transportation operating income roughly $20 million above the $98.6 million posted in 2025, driven by improving Shanghai yields and stronger China trade lanes. The trajectory of China demand through the second and third quarter peak season is the key near-term catalyst.

Trade policy is the dominant external catalyst. The US-China trade deal announced October 30, 2025 reduced Transpacific uncertainty, including a one-year suspension of port entry fees from November 10 and reduced tariffs, and in February 2026 the Supreme Court struck down key elements of certain tariffs, with US Customs halting collection effective February 24, 2026. A more stable trade environment supports the China service; renewed tariff escalation or a demand slowdown is the main downside, with near-term fuel cost headwinds from the Iran conflict also flagged by management.

The capital cycle and buyback are the structural items to watch. Three new Aloha-class vessels are due in Q1 2027, Q3 2027, and Q2 2028, with about 92% of remaining milestone payments covered by the Capital Construction Fund, against roughly $400 million of vessel construction and $150 million to $170 million of other capex in the plan. On capital return, Matson repurchased about 0.4 million shares for $54.4 million in Q1 and added 3.0 million shares to its program through December 2029, having retired roughly 33% of shares since 2021. The catalysts that would re-rate the stock are a confirmed China peak-season recovery and continued buybacks; the risk is a soft China lane colliding with the vessel capex bill.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

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