DSV Panalpina A/S

J.P. Morgan downgraded freight forwarder DSV to "neutral" from "overweight" and cut its price target to DKK 1,400 from DKK 2,165, citing deeper-than-expected gross profit losses in the company's Road division. The broker also removed DSV from its Analyst Focus List, saying it had "lost conviction" on the strong earnings growth it originally expected after DSV's acquisition of Schenker, as core business pressure that began in Air & Sea is now visible in Road. J.P. Morgan said it was prompted by a better understanding of Road's operational and customer problems after management held group calls in mid-September, and by its own survey of more than 300 DSV customers in the last week of September, which gave DSV a low net promoter score of 2.5 and indicated the operational problems had not been fully resolved. Because Road handles a high share of groupage volumes, the analysts said lost activity falls fully through to earnings, and it now assumes Road gross profit will fall 7% year-on-year in both the third and fourth quarters of 2026. As a result, it cut its Road operating profit forecast for the third quarter to DKK 412 million from DKK 715 million, and for the fourth quarter to DKK 580 million from DKK 1.08 billion, while lowering its expectation for cost savings from combining Road with Schenker to DKK 750 million in 2027 from DKK 3.00 billion. The broker lowered its 2027-2031 earnings-per-share forecasts by about 20% and now expects 2026 group EBIT of DKK 24.23 billion and 2027 EBIT of DKK 26.40 billion, 5% and 14% below its previous forecasts, with net income and earnings-per-share estimates for 2027-2031 about 10% below consensus, and it applied a 50% haircut to the earnings improvements DSV targeted under its "DSV 3.0" programme. J.P. Morgan said it still expects earnings growth of about 20% a year, helped by a share buyback it assumes will resume in the first quarter of 2027, and that DSV remains its preferred freight forwarder.

DSV's stock has been downgraded to a Zacks Rank #5 (Strong Sell) after its second-quarter results disappointed investors and triggered a wave of downward earnings estimate revisions. While quarterly revenue more than doubled year over year to $11.92 billion, adjusted earnings of $1.13 per share missed the consensus estimate of $1.20, and the Road division underperformed due to operational issues in key European markets. Over the past 90 days, analysts have cut current-quarter EPS estimates by 11.48% to $1.31, next-quarter estimates by 10.67% to $1.59, full-year fiscal 2026 estimates by 9.17% to $4.75, and fiscal 2027 estimates by 9.35% to $6.59. The integration of DB Schenker, while expected to generate billions in annual synergies by 2027, introduces near-term execution risk, and management cited geopolitical uncertainty, elevated fuel costs, and uneven global freight demand as ongoing headwinds.