On August 5, $DHL (+0,56 %) its quarterly earnings. According to the current analyst consensus (Investing.com), the following are expected:
• EPS: €0.89
• Revenue: €20.94 billion
Revenue and EPS only provide a first impression at this stage. I find the question of whether $DHL (+0,56 %) the company can confirm the current recovery. Following the strong stock performance, expectations have now risen significantly. For me, it will therefore be particularly important to see whether $DHL (+0,56 %) can continue to grow under its own steam or whether the recent strong results are primarily due to consistent cost discipline.
Consequently, I’ll be paying close attention to EBIT, free cash flow, margin trends, and the performance of the individual business segments. In particular, the Express, Global Forwarding, and Supply Chain segments are likely to once again be the main drivers of growth. I’m particularly curious to see whether the Express business will continue to stabilize and whether the international B2B business will gain additional momentum. At the same time, I’m interested in whether the global trade environment will provide some tailwind again or whether demand will remain rather subdued.
Another point I’ll be keeping an eye on is the ongoing “Fit for Growth” program. The planned cost savings have recently been a key driver of earnings. In the long term, however, I expect growth to come more strongly from core operations again, rather than primarily from cost reductions.
When it comes to capital allocation, however, I do not expect any major surprises. $DHL (+0,56 %) In recent years, the company has demonstrated that dividends, share buybacks, and investments are well balanced. For me, therefore, the key factor remains whether free cash flow can continue to adequately cover capital returns while still leaving sufficient leeway for investments.
I also find the recently announced partnership with Leidos exciting. While it’s unlikely to play a role in the upcoming quarterly results, in the long term it could $DHL (+0,56 %) open up access to an interesting market in the field of defense logistics. For my investment thesis, this is currently more of a bonus than a decisive factor.
I also find the analyst consensus interesting. According to Investing.com, 5 analysts currently recommend buying the stock, 12 rate it as a “Hold,” and 3 issue a “Sell” recommendation. The average price target is currently even slightly below today’s price. To me, this shows that the market has become somewhat more cautious following the strong price performance. That’s precisely why, this time around, it’s likely to be less about the actual numbers and more about management’s outlook.
My key points to watch for the quarterly results
• EBIT and operating margin trends
• Free cash flow and capital allocation
• Shipment volume trends in the express business
• Performance of the Global Forwarding and Supply Chain divisions
• Progress on the “Fit for Growth” program
• Comments on global trade and transport volumes
• Outlook for the second half of the year
Overall, I expect a solid quarter, but I believe that a slight beat in revenue or EPS will hardly be enough this time. It will be much more important to see whether $DHL (+0,56 %) can demonstrate that the core business is regaining momentum and that the chosen course is sustainable. $DHL (+0,56 %) is already part of my portfolio. Following the strong price performance, I’m currently a bit more cautious about making further individual purchases, but I’m keeping the stock in my savings plan because I’m convinced of the company’s long-term potential. For me, the upcoming quarterly results will therefore primarily show whether the market has already priced in a large portion of the company’s positive development, or whether we are seeing a sustainable and long-term positive trend here.
~ Not investment advice ~