RBC starts bullish DHL coverage on Express growth, earnings upside

Investing.com -- RBC Capital Markets started coverage of global logistics company DHL Group with an “outperform” rating and a €67 price target, saying weight per day at its Express unit has returned to growth and it expects earnings there to beat consensus.

RBC said weight per day in Express rose 9.4% year on year in the second quarter, driven by a campaign targeting heavy business shipments of more than 50 kg on the existing network. Company comments suggest the growth will continue into the third quarter.

RBC forecasts DHL Express operating profit of about €5.6 billion by 2030, more than €0.5 billion above consensus, because it sees the unit as a global leader in a consolidated market with room to edge up real prices and margins. That would be about 7% annual growth from 2027 to 2030, below a 15-year median of 11%.

For 2026, RBC forecasts group operating profit of about €7 billion, slightly above consensus and above company guidance of more than €6.5 billion. It forecasts Express operating profit up 27% in the second half, against growth of 43% to 44% in the first half.

DHL has historically been a seasonal performer, with its share price outperformance driven by the fourth quarter, and RBC expects that to repeat in 2026.

Express delivered a 16.8% operating margin in the second quarter, with seven straight quarters of year-on-year profit growth in a flat volume market, helped by a cost restructuring and a modern 777 fleet that gives it a fuel cost advantage.

DHL’s share of the global time-definite international express market is approaching 50%, and above 50% in Europe, Asia and the Middle East and Africa.

RBC expects Express to generate more than 55% of group operating profit in 2026, up from less than 35% in 2013, and sees that shift supporting a higher valuation.

It said DHL trades at 6 to 7 times expected 2027 enterprise value to EBITDA, against 7 to 8 times for FedEx and UPS and about 12 times on average for freight forwarders. DHL has the smallest exposure to ocean freight among the forwarders, at 6% of group revenue, where RBC sees a risk that excess ship capacity will push down rates.

RBC rated DSV and Kuehne + Nagel “sector perform”, with price targets of DKK 1,250 and CHF 235.

RBC listed risks to its DHL view including changes in world trade growth, currency moves, geopolitical events, the pace of parcel volume growth and declining mail volumes at its German post and parcel unit.

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