On Thursday, BofA Securities adjusted its stance on Kuehne + Nagel International AG (KNIN:SW) (OTC: KHNGY), downgrading the stock from Neutral to Underperform and reducing the price target to CHF200.00 from CHF250.00.
The firm cited a challenging demand outlook for 2025, influenced by potential trade tariffs and the removal of the de minimis exemption in the United States, which could act as headwinds for global demand. This comes alongside an increase in supply within both the air and ocean markets.
The stock is currently trading near its 52-week low of $45.85, with a significant year-to-date decline of 29%. InvestingPro data shows three analysts have recently revised their earnings estimates downward for the upcoming period.
The downgrade is based on revised yield and volume projections for 2025, leading to a 7% decrease in the firm's EBIT estimate. This new estimate places BofA Securities' forecast 4% below the consensus. The analyst also noted that their 2024 dividend estimate for Kuehne + Nagel stands at CHF7.0, which is 13% below the consensus, translating to an approximate 3% yield. According to InvestingPro, the company has maintained dividend payments for 30 consecutive years, with a current dividend yield of 2.37%.
Kuehne + Nagel's shares have not performed as well as the broader sector, showing a 23% underperformance (K+N -27% vs sector -4%). Despite trading below its historical average P/E ratio of 23x at 21x 2025 earnings, the firm anticipates a potential further de-rating. This expectation is based on an analysis suggesting that Kuehne + Nagel's P/E ratio aligns with container freight rates.
The reduced price objective to CHF200 from CHF250 is a result of lowered earnings estimates and a revised target multiple of 20x, down from 23x. Despite the downgrade for Kuehne + Nagel, BofA Securities has expressed a preference for DSV, which maintains a Buy rating.
In other recent news, Kuehne + Nagel International AG is witnessing a shift in the perspectives of financial analysts.
HSBC revised its outlook on the company, reducing the price target from CHF255.00 to CHF248.00, attributing this adjustment to an anticipated decrease in earnings momentum for the latter part of the year. However, the firm maintained a Hold rating on the stock, suggesting that the current stock price aligns with market consensus.
In parallel, UBS decided to uphold its Neutral stance on Kuehne + Nagel stock, keeping the price target at CHF266.00. The firm noted mixed global freight trends, with Europe and North America showing growth, while other regions saw a decline.
These are recent developments that reflect a cautious approach towards Kuehne + Nagel due to fluctuations in global shipping trends and changes in earnings projections. Both HSBC and UBS have adjusted their stances based on these factors, emphasizing the impact of external market conditions on the company's performance.
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