Af Michael Field, CFA, Morningstar Aktieanalytiker.
Narrow-moat DSV released a solid set of Q1 results with underlying revenue rising almost 8% over the period and EBIT margins hitting 7.3%, a level that will become a record high if maintained for the full year. These numbers are in line with our expectations and we therefore we do not expect to make any changes to our near-term forecasts, nor to our DKK 440 fair value estimate. We believe the shares are currently overpriced.
The sea and air divisions, which together generate 45% of group revenue, continued to grow volumes in the mid-single-digit range, despite market growth hovering either side of zero for both businesses. The EBIT margins for the two divisions also rose to new all-time highs of 10.7%, driven by productivity gains, as the business rolls out global IT and back-office infrastructure. The volume growth story for the road business was similar, against a backdrop of weak market volumes, as margins increased to 3.7%, from 3.1% this time in 2018. The solutions division, which primarily provides logistics and warehouse solutions, also had strong mid-single-digit revenue growth combined with an improved EBIT margin, as it rose to 6.3% over the period, an improvement of almost 200 basis points year over year.
The announcement earlier this month that the company has agreed to a deal with Panalpina has been positively received by investors. While some industry peers have commented on the lofty valuation paid by DSV in the all-share offer, today's updates will buoy investors, who believe that management can successfully integrate the Panalpina operations into the current DSV framework and continue to make efficiency savings.
Alle estimater og vurderinger er per 30. april 2019 af Michael Field, CFA, Morningstar Equity Analyst.
Michael Field har ingen positioner i de nævnte værdipapirer.
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