Tags: Expeditors | bucks | trend | EXPD

Expeditors International Bucks Market Trend

By    |   Friday, 14 Oct 2011 03:04 PM

Expeditors International of Washington (EXPD) has a stock valuation that seems richer than the fundamentals would indicate. At a time when the price to earnings ratio of the broader market is in the low teens, Expeditors bucks the market trend with a P/E of 22. Analysts see growth, although it’s hard to find much justification for the high P/E, all things considered.

Expeditors International of Washington is a logistics company which arranges air and ocean freight services for its customers. The company also engages in customs brokerage.

For the first half of 2011, just under half of revenues were from air freight services. Ocean freight services was good for 30 percent, leaving about 20 percent of revenues coming in from customs brokerage. About three-quarters of revenues were generated outside the United States.

For the first half of 2011, Expeditors International had revenues of $3.04 billion, up 12 percent from $2.73 billion a year earlier. Net income for the half was 86 cents per share, up from 70 cents in the first half of 2010. For the full year net income is forecast to be $1.85 compared to $1.59 earned in 2010. The consensus estimated earnings for 2012 is $2.09.

The company pays dividends semi-annually with a current rate of 50 cents per year. Expeditors International had cash on hand of $1.22 billion and no debt at the end of the first half.

Strong ratings

In the third quarter of 2011, EXPD’s share value declined 26 percent, 10 points more than the Nasdaq Composite index. For the year-to-date the stock was off almost 30 percent, triple the overall market decline.

However, Wall Street analysts have been lifting their ratings on the stock. The analysts at Lazard Capital recently initiated coverage on EXPD with a buy rating. Piper Jaffray analysts also upgraded the stock to a buy from neutral while analysts at Robert W. Baird upgraded to outperform from neutral.

The company next reports on Nov. 2.

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Expeditors International of Washington (EXPD) has a stock valuation that seems richer than the fundamentals would indicate. At a time when the price to earnings ratio of the broader market is in the low teens, Expeditors bucks the market trend with a P/E of 22. Analysts see...
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Friday, 14 Oct 2011 03:04 PM
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