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Here's Why You Should Retain Expeditors (EXPD) Stock Now
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Expeditors International of Washington, Inc. (EXPD - Free Report) is benefiting from its solid liquidity as well as shareholder-friendly measures. However, escalating operating expenses are headwinds.
Factors Favoring EXPD
Expeditors' increasing current ratio (a measure of liquidity) is encouraging. The measure was 2.20 at 2022-end compared with 2.07 at the end of the third quarter of 2022. A current ratio of more than 1 indicates that the company's assets will be able to cover its debts that are due at the end of the year.
We are impressed by Expeditors' efforts to reward shareholders through dividend payments and buybacks. In the pandemic-ravaged 2020 and 2021, the company repurchased 4.6 million and 4.4 million shares at an average price of $72.26 and $117.54 per share.
In May 2022, the company had announced a 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34). In 2022, EXPD repurchased 14.5 million shares of common stock at an average price of $108.88 per share and paid cash dividends of $1.34 per share.
Key Risk
Expeditors is being hurt by the increase in operating expenses. Notably, operating expenses increased more than 4% year over year in 2022, despite the company's cost-cutting initiatives to combat weak demand. High operating expenses are restricting the bottom-line growth.
American Airlines, currently carrying a Zacks Rank #2 (Buy), is benefiting from the improved air-travel-demand situation. In the fourth quarter of 2022, AAL reported earnings of $1.17 per share, surpassing the Zacks Consensus Estimate by 2.63%.
For first-quarter and full-year 2023, AAL’s earnings are expected to register 100.4% and 332% growth, respectively, on a year-over-year basis.
Alaska Air, carrying a Zacks Rank #2 at present, is seeing continued improvement in air-travel demand. On the back of upbeat air-travel demand and favorable pricing, Air Alaska Air reported better-than-expected earnings per share for the fourth quarter of 2022. ALK expects first-quarter 2023 total revenues to increase 29-32% from the first-quarter 2022 actuals.
For first-quarter and full-year 2023, ALK’s earnings are expected to register 69.9% and 31.7% growth, respectively, on a year-over-year basis.
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Here's Why You Should Retain Expeditors (EXPD) Stock Now
Expeditors International of Washington, Inc. (EXPD - Free Report) is benefiting from its solid liquidity as well as shareholder-friendly measures. However, escalating operating expenses are headwinds.
Factors Favoring EXPD
Expeditors' increasing current ratio (a measure of liquidity) is encouraging. The measure was 2.20 at 2022-end compared with 2.07 at the end of the third quarter of 2022. A current ratio of more than 1 indicates that the company's assets will be able to cover its debts that are due at the end of the year.
We are impressed by Expeditors' efforts to reward shareholders through dividend payments and buybacks. In the pandemic-ravaged 2020 and 2021, the company repurchased 4.6 million and 4.4 million shares at an average price of $72.26 and $117.54 per share.
In May 2022, the company had announced a 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34). In 2022, EXPD repurchased 14.5 million shares of common stock at an average price of $108.88 per share and paid cash dividends of $1.34 per share.
Key Risk
Expeditors is being hurt by the increase in operating expenses. Notably, operating expenses increased more than 4% year over year in 2022, despite the company's cost-cutting initiatives to combat weak demand. High operating expenses are restricting the bottom-line growth.
Zacks Rank & Key Picks
Expeditors currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Transportation sector are American Airlines (AAL - Free Report) and Alaska Air Group, Inc. (ALK - Free Report) .
American Airlines, currently carrying a Zacks Rank #2 (Buy), is benefiting from the improved air-travel-demand situation. In the fourth quarter of 2022, AAL reported earnings of $1.17 per share, surpassing the Zacks Consensus Estimate by 2.63%.
For first-quarter and full-year 2023, AAL’s earnings are expected to register 100.4% and 332% growth, respectively, on a year-over-year basis.
Alaska Air, carrying a Zacks Rank #2 at present, is seeing continued improvement in air-travel demand. On the back of upbeat air-travel demand and favorable pricing, Air Alaska Air reported better-than-expected earnings per share for the fourth quarter of 2022. ALK expects first-quarter 2023 total revenues to increase 29-32% from the first-quarter 2022 actuals.
For first-quarter and full-year 2023, ALK’s earnings are expected to register 69.9% and 31.7% growth, respectively, on a year-over-year basis.