On Tuesday, Barclays upgraded shares of Kuehne + Nagel International AG (KNIN:SW) (OTC: KHNGY) from Underweight to Equalweight, while also increasing the price target to CHF255.00 from the previous CHF210.00. The adjustment reflects a lowered risk-free rate in the firm's discounted cash flow (DCF) valuation and an uptick in near-term estimates.
The firm's FY24e EBIT forecast was raised by 4%, aligning it closely with the Bloomberg consensus. Barclays noted that the medium-term forecasts for Kuehne + Nagel remained largely unaltered. Kuehne + Nagel, being significantly involved in ocean freight forwarding, is poised to benefit from the current disruptions in the Red Sea, given their scale and contractual power with ocean carriers.
Despite the positive outlook on operational efficiency and the potential benefits from the Red Sea disruption, Barclays pointed out that both their own and consensus medium-term gross profit yields do not match the targets set during the company's Capital Markets Day (CMD). This suggests a balanced risk/reward profile for the company's stock.
Barclays also highlighted Kuehne + Nagel's efforts to improve operational efficiency through a leaner internal structure. Additionally, the company has been focusing on enhancing global connectivity with cloud-based customer relationship management (CRM) systems and expanding its presence in secondary cities to better serve small and medium-sized enterprises (SMEs).
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