Why Expeditors International of Washington Is On Investors’ Radar

Expeditors International of Washington (EXPD) is getting attention after recent share price moves, with the stock last closing at US$147.38. Investors are weighing this level against its earnings profile and return history.

Recent trading has been choppy, with a 30 day share price return of 4.36% offset by a 90 day share price decline of 7.93%. The 1 year total shareholder return of 37.67% points to stronger longer term momentum.

If this kind of move has you thinking about what else is setting up for potential opportunities, it could be worth scanning 33 power grid technology and infrastructure stocks

With Expeditors trading around US$147.38, roughly a 4% intrinsic discount but a premium to the average analyst target of US$139.50, you have to ask: is there real value left here, or is the market already pricing in future growth?

Preferred P/E of 24.2x: Is It Justified?

On the numbers given, Expeditors is trading on a P/E of 24.2x, which sits above both its estimated fair P/E of 16.6x and the logistics industry average of 16.2x, even though the last close of $147.38 is 3.8% below the SWS DCF estimate of $153.21.

The P/E ratio compares the current share price with earnings per share, so a higher multiple usually reflects stronger growth expectations or a perceived quality premium. For Expeditors, earnings are forecast to grow 4.36% a year, which is slower than both the wider US market earnings forecast of 16.2% a year and the revenue forecast of 3.3% a year. That gap between growth expectations and a relatively rich P/E suggests investors are paying up for factors other than headline growth alone.

Compared with the Global Logistics industry average P/E of 16.2x and the peer group average of 22.5x, Expeditors sits on the expensive side. The estimated fair P/E of 16.6x is also well below the current 24.2x, which points to a level the market could move toward if sentiment or growth expectations cool.

Result: Price-to-earnings of 24.2x (OVERVALUED)

However, that premium P/E could be sensitive to a slowdown in Expeditors’ 3.3% revenue growth or to any shift in sentiment after the recent 7.93% 90 day share price decline.

Another View: DCF Points in a Different Direction

While the 24.2x P/E makes Expeditors look expensive next to its fair ratio of 16.6x and the 16.2x industry average, the SWS DCF model points the other way, with a fair value estimate of $153.21 versus the current $147.38. That 3.8% gap suggests a mild undervaluation. Which signal matters more for you: the earnings multiple or the cash flow view?

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 53 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

With mixed signals from P/E and DCF in mind, it helps to move quickly, check the underlying data yourself, and decide where you stand based on the 2 key rewards and 1 important warning sign.

Looking For More Investment Ideas?

If Expeditors has you thinking harder about price, quality, and risk, do not stop here. Widen your watchlist now before the next move happens elsewhere.

• Target resilience by focusing on companies with strong financial footing through the solid balance sheet and fundamentals stocks screener (44 results).
• Spot price gaps where fundamentals and valuation appear out of sync using the 53 high quality undervalued stocks.
• Unearth potential future leaders before they are widely followed with the screener containing 25 high quality undiscovered gems.

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.