Narrow-Moat Kuehne + Nagel Makes Hay While the Sun Shines

Narrow-moat Kuehne+Nagel delivered a strong start to 2021 with revenue rising almost 23% year over year. While this was partly a result of easy comparatives, with the global coronavirus causing maximum disruption in the first quarter last year, it was also a result of unprecedented demand in specific segments as shippers attempt desperately to relieve bottlenecks. Although we expect to revisit our near-term forecasts on the back of this data point, we do not expect this to have a material effect on our CHF 160 fair value estimate, which is currently looking rather anaemic next to the prevailing share price. Ultimately however, we believe investors have become overly excited about the resilience of the 3PLs over the last year and are extrapolating unsustainable levels of financial performance. Kuehne+Nagel's share price has shot up by close to 140% since March 2020, and almost 50% in the last two months alone, reflective we believe, of this frenzied investor gravitation to high-performing stocks.