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Investing.com -- UBS raised its rating on DHL Group to Neutral, citing early signs that the peak shipping season is stabilizing after several weak quarters.
The company’s shares rose 1.4% in Germany by 10:42 GMt.
The bank said fresh data points from air-cargo markets and its own analysis indicate that volume and pricing trends in the fourth quarter are improving sequentially compared with the pressures seen through mid-2025.
“Recent general air cargo rates and capacity deployment data suggests the market backdrop is less unfavourable vs. Q2/Q3 trends,” helped partly by temporary tailwinds such as the MD-11 grounding, UBS analyst Cristian Nedelcu wrote.
UBS lifted its 2025 and 2026 EBIT estimates by 7% and 2%, pointing to stronger cost execution, better-than-expected letter mail volumes, and one-off benefits realized year-to-date. DHL’s own dedicated freighter capacity also shows signs of stabilization.
The bank’s Evidence Lab data shows deployment in October and November was down only low single digits or flat year-on-year, an improvement from the mid- to high-single-digit declines recorded in the second and third quarters.
“While this may partly be explained by capacity adjustments during 4Q24 we believe it may also reflect a sequential improvement in the rate of decline in Express weights,” Nedelcu said.
The analyst still sees structural headwinds for Express volumes over the medium term. He highlights “structural downtrading in Express” and regulatory risks tied to de-minimis changes in the U.S. and Europe.
Even with a cyclical recovery, UBS expects volume growth to remain below management’s targets, and its fiscal 2026–27 EBIT forecasts sit 2–3% below consensus.
Still, limited downside to Street expectations and evidence of a firmer peak season prompted the upgrade.
UBS increased its price target to €42.5 from €36, supported by higher estimates in Express and the German PeP business, and by expectations that cost-cutting, supply-chain growth and a second-half 2026 volume improvement can offset regulatory drag.