Trade tensions and rising geopolitical conflicts are disrupting the global supply chain via “higher tariffs, non-tariffs, sanctions or even physical barriers” this year, as per Goldman Sachs.
Supply chain disruptions are broadly seen as a negative for logistics companies.
Still, analysts at the Wall Street bank are convinced that a handful of “well-positioned” names in that space could benefit from the added complexity in the global supply chain.
These include DHL, FedEx, and Maersk.
Let’s explore what each of these has in store for investors amidst the current economic backdrop.
Deutsche Post AG (ETR: DHL)
DHL Forwarding has a strong enough footing to “help their clients navigate higher complexity and shocks” in the global supply chain, as per Goldman Sachs.
Deutsche Post is fairly positioned to “deal with short-term crises” with a combination of sea and air solutions.
Additionally, the Bonn headquartered firm could somewhat insulate clients against higher freight costs with its LCL (less than one container load) business, the investment firm added.
DHL stock currently pays a rather lucrative dividend yield of 4.80% which makes it all the more exciting to own for healthy total returns over the next 12 months.
FedEx Corp (NYSE: FDX)
Goldman Sachs expects FedEx to benefit from supply chain disruptions as they typically lead to more demand for faster international shipments.
Increased demand and limited capacity may ultimately enable the logistics giant to charge premium rates for its services and improve its profitability which took a big hit in fiscal Q1.
In September, FedEx lowered its full-year outlook as well resulting in a steep decline in its share price that hasn’t yet recovered. But investors should buy the current dip as FDX remains well-positioned for the long-term, as per famed investor Jim Cramer.
Wall Street also currently sees an upside in FedEx stock to $312 on average indicating a near 20% potential upside from here.
AP Moeller – Maersk A/S (CPH: MAERSK-B)
Maersk has relatively limited direct exposure to the global supply chain disruptions in Goldman Sachs’ view.
Moreover, the Danish behemoth is committed to beating rivals with a combination of conventional shipping and more sophisticated logistics services, as per the investment firm.
“Disruption events have recently contributed to tightening the market in favor of shipping lines,” it told clients in a recent research note.
Maersk is one of the most reliable names in shipping and logistics. It could, therefore, end up winning new customers and long-term contracts as businesses seek stability during uncertain times.
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