(Bloomberg) -- Deutsche Post AG shares got their first sell-equivalent rating in six months as BNP Paribas Exane said analysts may need to slash earnings estimates for the German logistics group.
Exane’s Robert Joynson downgraded the DHL operator to underperform from neutral, making him the only analyst with a bearish recommendation among 22 surveyed by Bloomberg. The shares fell as much as 1.6%, underperforming a broad market rally that followed the US Federal Reserve rate cut on Wednesday.
“Our analysis suggests risk skewed to the downside given the likelihood of a profit warning for FY 2024, large consensus downgrades for FY 2025 and dilutions to mid-term guidance,” Joynson said in a note to clients.
It’s the first time Exane has had an underperform rating on the Deutsche Post, having previously rated the shares outperform for seven years through May, according to data compiled by Bloomberg.
Logistics firms like DHL are often seen as indicators of the health of the macro-economy. Earlier this year, Bloomberg Intelligence analysts warned that the company’s volumes were threatened by weaker activity in Europe and China. Sea-cargo disruption in the Red Sea, however, was viewed as a positive for the firm’s air freight business.
Deutsche Post’s valuation is also a potential bright spot, with the shares trading at a discount to US rival FedEx Corp. The German stock is priced at 12 times earnings expected a year from now versus FedEx’s 14 times. But that’s no reason to be bullish, according to Exane.
“Cheap stocks can get cheaper,” Joynson said.
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