3 Must-Watch Logistics Stocks for Year-End Investors

Core Viewpoint - Logistics companies are currently facing challenges due to supply-chain disruptions, high inflation, and weak demand, but signs of easing conditions and cooling inflation may present opportunities for recovery as 2025 approaches [2][4][6]. Industry Overview - The logistics sector is experiencing increased costs related to warehousing, packaging, and labor due to ongoing supply-chain issues and a shortage of skilled labor in the U.S. [3] - Geopolitical uncertainty and inflation are negatively impacting consumer sentiment and growth expectations, leading to a decline in shipping volumes, particularly in Asia and Europe [4][5]. Company-Specific Insights - United Parcel Service (UPS): - UPS has revised its full-year 2024 revenue forecast down to $91.1 billion from $93 billion, reflecting a slowdown in shipping demand and online sales [4][5]. - The company has a Zacks Rank of 3 and has shown robust free cash flow generation, supporting shareholder-friendly activities [14]. - UPS's expected earnings growth rate for the next year is projected at 17%, indicating potential recovery [15]. - Expeditors International of Washington (EXPD): - EXPD holds a Zacks Rank of 2 (Buy) and has consistently outperformed earnings estimates, with a positive liquidity position [11][12]. - The Zacks Consensus Estimate for 2025 earnings has increased by 0.4% over the past 30 days [12]. - C.H. Robinson Worldwide (CHRW): - CHRW operates as an asset-light logistics player with a Zacks Rank of 3, focusing on cost control and shareholder rewards [17]. - The Zacks Consensus Estimate for 2025 earnings has risen by 2.4% in the last 60 days [17]. Market Trends - The decline in oil prices by 14% in the July-September period is beneficial for logistics companies, as lower fuel costs can enhance profitability [8]. - E-commerce demand, while slowing from pandemic peaks, continues to support growth in logistics, particularly for companies like UPS [9]. Future Outlook - Companies are focusing on cost-cutting measures and improving productivity to mitigate inflationary pressures, which is expected to enhance margins [6]. - Automation and advancements in technology such as AI and blockchain are anticipated to alleviate labor shortages and improve operational efficiency in the logistics sector [7].