DHL Group (ETR: DHLn) has been upgraded to a "Buy" rating from "Hold" by Deutsche Bank, with the price target raised to €50 from €36. The upgrade follows a more realistic earnings outlook and de-risked guidance.
Key Highlights:
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Q4 Performance: DHL reported a strong Q4 with operating profit (EBIT) of €1.85 billion, exceeding consensus estimates by 4%. This result has allowed Deutsche Bank to revise its outlook, as guidance has been de-risked and set at more achievable levels.
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Express Division: The Express division was the standout performer, posting an EBIT of €1.08 billion, 11% above expectations. This was driven by solid pricing strategies and cost controls. Overall, revenue grew by 6% year-over-year, reaching €22.7 billion.
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2025 & 2026 Outlook:
- DHL forecasts EBIT of at least €6 billion for 2025, slightly below the market consensus of €6.29 billion.
- For 2026, DHL's target has been revised to a more conservative €7 billion due to macroeconomic uncertainties.
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Shareholder Returns: DHL announced a €3 billion share buyback program for 2025-2026, equating to €1.5 billion annually, which, along with dividends, is expected to boost total cash returns to around 8%.
Segment Performance:
- Post & Parcel: The division posted solid EBIT of €326 million.
- eCommerce: The segment saw a 39% year-over-year increase, with EBIT rising to €106 million.
- Global Forwarding & Freight: This division underperformed with an EBIT of €255 million, falling 7% below expectations.
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