Will This Downgrade Hurt Expeditors International of Washington (EXPD) Today? (Update)

Update (9:40 a.m.): Updated with Monday market open information.

NEW YORK (TheStreet) -- FBR Capital downgraded Expeditors International of Washington  (EXPD) to "market perform" from "outperform" and set a $45 target price. The firm noted the company is likely to face pricing headwinds. 

The stock was falling 0.83% to $39.49 at 9:37 a.m. on Monday.

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Separately, TheStreet Ratings team rates EXPEDITORS INTL WASH INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXPEDITORS INTL WASH INC (EXPD) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EXPD's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EXPD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.70, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $61.95 million or 1.98% when compared to the same quarter last year. In addition, EXPEDITORS INTL WASH INC has also modestly surpassed the industry average cash flow growth rate of 1.70%.
  • EXPEDITORS INTL WASH INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EXPEDITORS INTL WASH INC increased its bottom line by earning $1.70 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.70).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Air Freight & Logistics industry and the overall market on the basis of return on equity, EXPEDITORS INTL WASH INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: EXPD Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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