Narrow-Moat Kuehne + Nagel Motors Through Third Quarter

Narrow-moat Kuehne + Nagel International delivered a strong third-quarter update, with revenue up 70% year over year and EBITDA up more than 60%. This comes on the back of tight capacity in shipping markets, which have caused freight rates to spike, and allowed third-party logistics, or 3PL, firms such as Kuehne + Nagel to leverage its strong position in sea freight to capture higher fees. With the share price having more than doubled since the beginning of the coronavirus pandemic, we view the Oct. 20 share price decline as simply the market adjusting in a very minor way to the possibility that the current situation in shipping markets may not continue forever. We reiterate our CHF 160 fair value estimate and view the shares as overvalued.