Kuehne + Nagel

K&N held its CMD yesterday and our analyst believes that the new strategy puts the story in a wait-and-watch mode.

Roadmap 26, the previous plan was a clear miss on the financial objectives due to dearth of volumes and overoptimism.

Roadmap 30 echoes a lot of uncertainty and the targeted conversion rate of 35% for Sea & Air Logistics isn’t very exciting.

We understand that the management is probably erring on the safe side because of the uncertainties on the trade tariffs and the previous Roadmap.

In all we believe the consensus is likely to slightly downgrade its expectations for the next couple of years.

There are too many uncertainties on the macro side to go long in logistics. Valuation isn’t cheap with PE 25 and 26 at 20.2x and 19.3x respectively.

The only silver lining is the commitment on the distribution for the dividend but with a yield around 4% this isn’t enough to get really excited. We would wait until we have better clarity on where the world trade will shape before taking a position on the name.