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On Tuesday, TD Cowen analysts adjusted their outlook on Kuehne + Nagel International AG (KNIN:SW) (OTC: KHNGY), a $28.6 billion market cap logistics giant currently trading at $46, lowering the price target from CHF242.00 to CHF222.00, but maintained a Hold rating on the stock. According to InvestingPro data, the stock is trading near its 52-week low of $43.66, with relatively low price volatility. The revision comes as the company reported a slight miss in its fourth-quarter performance and faces uncertainties regarding tariffs and de minimis regulations that make it difficult to project future volumes and yields. Despite these challenges, the company maintains strong fundamentals with revenue of $28 billion and a P/E ratio of 21x.
The analysts detailed that while Kuehne + Nagel has minimal direct exposure to de minimis changes, the air freight sector is expected to encounter significant rate pressures as capacity increases. Additionally, with ocean freight rates showing volatility in the first quarter, there is an anticipation of a decline throughout the year, posing a challenging environment for Kuehne + Nagel in 2025.
The long-term outlook for the company is set to be presented at the upcoming investor day. Analysts are closely monitoring the situation, noting that the changing dynamics in the logistics industry, particularly in air and ocean freight rates, could significantly impact Kuehne + Nagel’s operations.
In their analysis, TD Cowen highlighted the volatile nature of ocean rates in the first quarter and projected declines through the year, which could create a tough scenario for Kuehne + Nagel. Despite these challenges, the firm reiterated its Hold rating, suggesting a cautious approach to the stock amidst the current uncertainties.
The new price target of CHF222.00 reflects the potential headwinds Kuehne + Nagel may face, with the analysts at TD Cowen providing a tempered expectation for the company’s stock performance in the near term. Investors are advised to look forward to the company’s long-term strategy presentation for further insights into how Kuehne + Nagel plans to navigate the anticipated challenges in the logistics sector.
In other recent news, Kuehne + Nagel International AG has seen its stock downgraded by BofA Securities from Neutral to Underperform. This adjustment was accompanied by a reduction in the price target from CHF250.00 to CHF200.00. The decision was influenced by a challenging demand outlook for 2025, impacted by potential trade tariffs and changes in U.S. exemptions that could affect global demand. BofA Securities has also revised its earnings estimates, projecting a 7% decrease in EBIT, which places their forecast 4% below the consensus.
In addition, the firm’s 2024 dividend estimate for Kuehne + Nagel is set at CHF7.0, approximately 13% below the consensus, resulting in an estimated 3% yield. The company’s shares have underperformed compared to the broader sector, showing a 23% underperformance. Despite trading below its historical average P/E ratio, there is an expectation of a further de-rating. The revised price objective reflects lowered earnings estimates and a new target multiple of 20x. Despite these developments, BofA Securities has expressed a preference for DSV, which retains a Buy rating.
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