Expeditors International (NYSE:EXPD) shares rose more than 2% on Wednesday after Baird analysts increased their price target on the company to $126 from $118 while maintaining a Neutral rating on the stock.
The analysts anticipate that Expeditors will surpass estimates in the second and likely third quarters, positioning the stock as a preferred choice amidst ongoing disruptions in global air and ocean freight markets. The company has seen a return to growth in freight volumes, aided by easier comparisons and effective execution. The first quarter of fiscal 2024 marked year-over-year growth in both air and ocean freight volumes for the first time since Q3/21, indicating a slow recovery in freight markets.
Sequential improvements in ocean and airfreight rates were noted in the first quarter following stabilization in the previous quarter. While near-term visibility remains limited, Expeditors continues to focus on operational efficiency amid ongoing trade disruptions. Growth in industry capacity is expected to persist due to new ocean vessels and additional air market capacity driven by international passenger travel. Key uncertainties include the duration of supply chain disruptions, spot market pricing strength, and potential trade war rhetoric resurfacing around the US election.