Matson (MATX), which provides ocean transportation and logistics services to Hawaii, Alaska and Guam, as well as in Micronesia and in the South Pacific, is down over 23% after an announcement from competitor TOTE that it intends to establish a new domestic shipping service to Hawaii that would compete with Matson.

TOTE announced on Thursday that it plans to establish a new domestic shipping service to Hawaii. TOTE, which currently ships to Alaska and Puerto Rico, has signed a letter of intent to acquire up to four newbuild containerships, and has already secured terminal space in Honolulu. The first two of TOTE's ships are scheduled for delivery in 2020 and 2021. TOTE CEO Anthony Chiarello said, "TOTE will bring the same commitment to our Hawai'i operations to ensure maritime transportation is industry leading."

Analyst reaction 

Stephens analyst Jack Atkins downgraded Matson to Equal Weight and lowered his price target to $23 from $36 following the news. Atkins said he sees risk to Matson's market share and thinks it could be a material headwind to profitability, if it materializes. However, Stifel analyst Ben Nolan upgraded Matson to Buy from Hold, saying competitive concerns are being overstated. Nolan did, however, lower his price target for Matson to $30 from $38.

Price action

Shares of Matson are down over 23% to $22.53 in Friday afternoon trading.