Recent performance snapshot for Expeditors International of Washington (EXPD)
Expeditors International of Washington (EXPD) has attracted attention after a period of mixed share performance, with a 1 day return near a 1% decline and a past 3 months return near a 7% decline.
At a recent closing price of US$141.22 and a market value of about US$18.97b, the company sits against a backdrop of modest annual revenue and net income growth, alongside strong multi year total returns.
See our latest analysis for Expeditors International of Washington.
Over the past year, a 19.39% total shareholder return contrasts with recent share price pressure, as the 7 day and 90 day share price returns of 3.51% and 7.24% declines suggest momentum has been fading after a strong longer term run.
If you are comparing Expeditors with other opportunities in logistics driven supply chains, it can be useful to widen the lens and review 20 top founder-led companies
With the share price near US$141 and an estimated intrinsic value suggesting around a 10% discount, the key question is whether Expeditors is trading below its fundamentals or if the market is already pricing in future growth.
Preferred P/E of 23.2x: Is it justified?
At a last close of $141.22, Expeditors International of Washington is trading on a P/E of 23.2x, which sits above both peers and the wider logistics industry.
The P/E ratio links the share price to current earnings, so a higher multiple often reflects the market assigning a premium to those earnings. For a logistics group like Expeditors, that can speak to expectations around earnings resilience, cash generation, or how efficiently the business turns its network into profit.
Here, the signals are mixed. On one hand, Expeditors has high quality earnings and a current Return on Equity of 34.4%, which is described as high. Earnings are also forecast to grow 4.3% per year, with growth rates better than the company’s own 5 year earnings record. On the other hand, that growth is still forecast to be slower than the broader US market, and earnings growth over the past year has not outpaced the logistics industry.
Relative to the Global Logistics industry average P/E of 15.4x, Expeditors trades at a clear premium. It also sits above the peer average P/E of 19.8x and above an estimated fair P/E of 17.2x, suggesting the current multiple is richer than where the market could potentially reset if sentiment cooled.
Explore the SWS fair ratio for Expeditors International of Washington
Result: Preferred multiple of Price-to-Earnings of 23.2x (OVERVALUED)
However, a premium P/E, a 7% 90-day share price decline, and a price target below the current US$141 level could all challenge the bullish case.
Find out about the key risks to this Expeditors International of Washington narrative.
Another view from the SWS DCF model
While the current P/E of 23.2x suggests Expeditors is expensive relative to peers and its own fair ratio of 17.2x, the SWS DCF model points the other way, with an estimated future cash flow value of $157.07 versus a share price of $141.22, implying the shares trade at about a 10% discount.
When one approach flags valuation risk and another implies upside, it raises a simple question for you as an investor: which set of assumptions feels more realistic for how this business might perform over time?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Expeditors International of Washington for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 61 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
The mixed signals on valuation, growth, and recent returns mean sentiment is far from one sided. It makes sense to move quickly and test the numbers yourself against your own expectations, then weigh both sides of the story with 2 key rewards and 1 important warning sign
Looking for more investment ideas?
If Expeditors has sparked your interest, do not stop here. Broaden your watchlist with other ideas that fit different goals and risk levels.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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