Citi cuts DSV stock rating, slashes price target to DKK1,499
Investing.com
Published May 07, 2025 03:13AM ET
On Wednesday, Citi analysts downgraded DSV A/S (DSV:DC) (OTC:DSDVF) stock rating from Buy to Neutral and significantly reduced the price target to DKK 1,499 from the previous DKK 2,300. The adjustment reflects concerns over anticipated lower freight rates affecting future profits. Despite the general market optimism following DSV's acquisition of DB Schenker, Citi expects this will not offset the forecasted decline in unit gross profit for Air and Sea freight services.
Citi's revised price target comes amid expectations that freight rates will lead to a reduction in unit gross profit by approximately 10% below 2024 levels. This anticipated decrease has prompted Citi to project adjusted EBIT for 2026 and 2028 at DKK 21,679 million and DKK 28,777 million, respectively. These figures are 14% and 8% lower than the Bloomberg consensus.
The downgrade stands in contrast to the broader analyst community's view, with 19 out of 20 analysts on Bloomberg maintaining a positive outlook on DSV. Citi acknowledged DSV's historically successful track record in enhancing earnings following acquisitions but remained cautious due to the expected impact of lower freight rates on the company's profitability in the coming years.
The change in Citi's stance on DSV stock underscores a more conservative outlook for the company's financial performance in the medium term. The lowered earnings projections and price target adjustment are based on the firm's analysis of the freight market dynamics and their potential influence on DSV's business operations.
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Written By: Investing.com
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