U.S. markets closed

Headwinds Swarm Expeditors (EXPD): Time to Dodge the Stock?

Zacks Equity Research

Shares of Expeditors International of Washington EXPD have declined 11.6% in the past year compared with its industry’s 17.5% fall.


Expeditors' primary revenue-generating segment, Airfreight Services, performed disappointingly in 2019 (revenues declined 10.5%), mainly due to slowdown in global trade following the U.S.-China trade war. Given the company’s considerable exposure in China (26% of last-year revenues came from China exports and imports) it is suffering due to soft shipment volumes. Notably, revenues from North Asia dwindled significantly in 2019.

The coronavirus outbreak in China is another woe. The company expects its first-quarter 2020 results to be hurt by this adversity. The extended closure of factories in China due to the COVID-19 pandemic might have dented freight volumes in the March quarter. Global supply chains are likely to have been disrupted by the dearth of raw materials, parts and supplies.

Expeditors' rising operating expenses are a concern too. Operating expenses escalated 18% year over year in 2018 due to higher labor costs among other items. Moreover, as Expeditors operates globally, it is exposed to foreign currency risks. Notably, foreign currency losses shot up more than 100% in 2019 on a year-over-year basis.

Southbound Estimate Revisions

The bearish sentiment surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised 5.7% downward in the past 60 days to $3.46.

Additionally, Expeditors carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In light of these downsides, it is advisable for investors to discard the stock from their portfolio for now.

Key Picks

Better-ranked stocks in the Zacks Transportation sector include Dynagas LNG Partners LP DLNG, GATX Corporation GATX and Frontline Limited FRO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dynagas LNG Partners, GATX and Frontline expect the current-year earnings to increase more than 2000%, 5.4% and 142%, respectively, year over year.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
Frontline Ltd. (FRO) : Free Stock Analysis Report
Dynagas LNG Partners LP (DLNG) : Free Stock Analysis Report
GATX Corporation (GATX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research