Expeditors Int'l Shares Upgraded To Overweight At Barclays

Expeditors International of Washington EXPD reported 2015 revenues of $6,617 million and EPS of $2.40. Barclays’ Brandon R. Oglenski upgraded the rating for the company from Equal-weight to Overweight, while raising the price target from $51 to $58.

Material Margin Contraction Concerns Overblown

Expeditors International is likely to achieve higher-than-expected margins, given soft international freight pricing, analyst Brandon Oglenski said. He expects the company’s global growth prospects to lend upside to shares.

Although Expeditors International’s margins are expected to contract in the near term, the company’s solid returns and robust cash flows remain positives, against an uncertain macro environment.

“Continued weak international freight pricing could actually support higher near-term margins for the company,” Oglenski wrote, while adding that investor concerns over material margin contraction appear “overblown.” The analyst expects management changes over the last two years to help the company get back to double digit growth.

“We generally agree that EXPD will see limited near-term growth given robust outcomes in 2015. Nonetheless, we find valuation attractive and want exposure to the company’s counter-cyclical earnings in an otherwise weak transport environment,” Oglenski stated.