Thursday, 21 March 2024 Reading time : 2 minutes

The shares of Kuehne + Nagel have been on a downward spiral since the logistics company announced its quarterly results in early March. At the end of February, the stocks traded slightly below CHF 300.00 and have since lost around 20%. On Thursday, they were trading around CHF 244.00.

Indeed, the results for the last quarter of the year were disappointing across the board, with both profit and revenues coming in well below market expectations, as Bloomberg data shows. As a result, analysts have lowered their 12-month price target for Kuehne + Nagel: while the consensus before earnings was around CHF 261.00, the market is now expecting CHF 246.65.

However, the setback may already be pricing in several negative developments, as the Swiss logistics provider's business was expected to normalize after the exceptional years of 2021 and 2022. Bottlenecks in global supply chains led to a boom in demand for the group's sea, air and land freight services, as the transport of goods became more complicated for customers. Kuehne + Nagel operates in more than 100 countries. The impact of these exceptional effects is now beginning to fade.

The outlook for Kuehne + Nagel might be less bleak than the recent price correction suggests. The logistics provider is seeing a positive trend in sea freight, where it has recorded volume growth in the past six months in a generally declining market, as stated in the press release regarding the latest quarterly results. Kuehne + Nagel has also gained market share on the sea routes between Asia and Europe as well as in the Pacific. In addition, the group plans to achieve cost savings of CHF 100 million in the medium term. Nevertheless, the business environment is expected to remain challenging in the current year. Speaking at an analyst conference, CEO Stefan Paul pointed to the crisis in the Red Sea, which could have a negative impact on the company's performance in the coming quarters, reports Reuters.

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