Goldman Sachs downgrades Expeditors to Sell on 'deteriorating' fundamentals

Goldman Sachs analyst Matthew Reustle downgraded Expeditors International of Washington to Sell from Neutral with an unchanged price target of $68. The stock closed yesterday down $1.24 to $74.30. The analyst sees "headwinds on the horizon" amid continued deceleration in the company's airfreight business and structural headwinds in its ocean freight business. He forecasts Expeditors' net revenue growth will slow to 4% in 2019 from 13% in 2018. This, combined with an expectation that tax rates will increase relative to 2018, implies the company's growth will decelerate to 2% in 2019, Reustle tells investors in a research note. The analyst believes "deteriorating" fundamentals, elevated exposure to a slowdown in global trade and "rich" valuations will drive shares lower in 2019.

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