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Investing.com -- Wolfe Research initiated coverage of Deutsche Post (ETR:DHLn) with a Peer Perform rating, highlighting the company’s strong position in premium international parcel delivery but warning of earnings headwinds next year.
While the company’s Express segment accounts for over half of group EBIT and has outperformed peers UPS and FedEx in margin growth over the past decade, the broker expects “a full year of no de minimis exemption" in 2026, along with weaker freight forwarding results and softer Post & Parcel earnings to limit growth.
Wolfe is modeling 2026 EBIT of €6.2 billion, which is 5% below consensus, and just 3% year-on-year growth despite ongoing cost reductions.
Deutsche Post has diversified significantly from its German postal roots, becoming the largest global contract logistics provider and a top-three freight forwarder. Its Express unit focuses on the Time Definite International market, where it holds a 47% share and commands higher yields than U.S. rivals.
Wolfe highlights that Express margins have improved from 7% in 2010 to an estimated 13% in 2025, despite a rising share of business-to-consumer (B2C) deliveries.
On valuation, Deutsche Post trades at about 13 times its 2026 EPS estimate, sitting between UPS at 13.5x and FedEx at 11x.
“Valuation feels attractive to us, but barring any strategic review or global PMI inflection, we don’t see a clear catalyst to drive shares higher in the near term,” analyst Jacob Lacks wrote.
In the second quarter, Deutsche Post reported adjusted EBIT of €1.43 billion, topping consensus by 7%, driven by an 11% rise in Express segment EBIT despite a 10% drop in Time Definite International volumes.
The company reiterated full-year EBIT guidance of €6 billion or more, assuming stable trade policy conditions.
Wolfe’s EPS forecasts are €3.05 for 2025, €3.25 for 2026, and €3.65 for 2027, with the latter two years slightly below consensus.
While cost savings from the “Fit For Growth” program and any rebound in business-to-business shipping could provide upside, Wolfe is taking a cautious stance for now.