Benchmark maintains hold on Expeditors Int’l stock amid cost control

On Wednesday, Benchmark analysts maintained their Hold rating on Expeditors International of Washington, Inc. (NYSE:EXPD) stock, acknowledging the company’s effective management and cost control measures. The logistics firm, which maintains a "GOOD" financial health score according to InvestingPro analysis, surpassed Benchmark’s revenue projections for the first quarter, reporting a 4% increase and earnings per share (EPS) of $1.47, which is a 26% rise year-over-year. This EPS figure exceeded both Benchmark’s estimate of $1.26 and the FactSet consensus of $1.37. Currently trading slightly below its Fair Value, Expeditors shows potential for modest upside.

Expeditors International achieved higher airfreight revenues through increased rates and tonnage, primarily driven by technology sector shipments that were expedited ahead of anticipated tariffs. The company also saw growth in ocean volumes, which were influenced by the same preemptive shipping practices and extended transit times due to the conflict in the Red Sea. Despite these positive results, the company has observed a significant drop in shipment volumes from China to the U.S. since the end of March. This trend, coupled with the removal of de-minimis exemptions and the potential for additional tariffs, poses challenges in forecasting global air and ocean capacity. InvestingPro data reveals that despite market challenges, the company maintains impressive profitability with a 38% return on equity.

The analyst noted that North Asia, which accounted for 26% of the total revenue in the first quarter and is the most profitable region for Expeditors, might see a downturn in the second quarter if the declining volumes persist. The firm’s valuation was deemed adequate by Benchmark, considering the fluctuating capacity in the market.

Expeditors’ strong financial position, characterized by a debt-free balance sheet, was also highlighted. The company has historically navigated downturns effectively while positioning itself for recovery, as evidenced by increased hiring in the fourth quarter of the previous year and the first quarter of 2025 without negatively impacting earnings growth. InvestingPro analysis confirms this robust financial health, showing the company maintains a healthy current ratio of 1.83 and has consistently raised its dividend for 28 consecutive years. For deeper insights into Expeditors’ financial strength and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Expeditors International reported a significant 26% year-over-year increase in earnings per share (EPS) to $1.47 for the first quarter of 2025, surpassing both BofA’s forecast of $1.23 and the consensus estimate of $1.37. The company’s Ocean Forwarding segment saw an 8% rise in ocean volumes and a 27% increase in ocean yields, exceeding expectations. In the Air Freight Forwarding division, airfreight kilos grew by 9%, with yields also rising by 9%, driven by shippers advancing their freight movements. Meanwhile, Benchmark analyst Christopher Kuhn maintained a Hold rating on Expeditors International, noting the company’s strong financial position and cost control measures that led to a 54% year-over-year increase in EPS for the fourth quarter. Despite surpassing revenue expectations, Kuhn highlighted uncertainties in global air and ocean supply conditions.

Additionally, TD Cowen raised its price target for Expeditors International to $117 from $108, while maintaining a Sell rating, citing global disruptions that have unexpectedly benefited the company. Leadership changes were also announced, with Robert A. Martinez appointed as President - Global Products, effective June 1, 2025, and Kelly K. Blacker set to become President - Global Geographies on April 1, 2025. Both executives have extensive experience within the company, suggesting a deep understanding of its operations. These developments reflect Expeditors International’s ongoing adaptation to volatile market conditions and strategic leadership transitions.

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