As more consumers shop online, logistics companies are stepping up efforts to meet the demand for faster and more efficient deliveries. With that in mind, it could be beneficial to invest in top logistics stocks like United Parcel Service (UPS), Universal Logistics Holdings (ULH), and Radiant Logistics (RLGT) . Read on…
E-commerce is booming, allowing people to shop from the comfort of their own homes with just a few clicks, leading to major changes in purchasing patterns. This has definitely changed the way we shop, but it has also brought major changes to the logistics sector.
Against this backdrop, it may be wise to buy up shares in logistics companies such as United Parcel Service, Inc. (UPS), Universal Logistics Holdings, Inc. (ULH), and Radiant Logistics, Inc. (RLGT). yeah. It is benefiting from the e-commerce boom.
As people increasingly rely on online shopping for convenience, the logistics industry is racing to keep up, transforming the way goods are stored, transported, and delivered. Global e-commerce sales are projected to reach $8.8 trillion by the end of 2024, and this market is expected to grow further to $8.81 trillion by 2029 at a steady annual growth rate of 15.8%. is expected to reach.
Additionally, the growing demand for faster delivery options, such as same-day delivery and on-demand delivery, is surging demand in the transportation sector and reshaping logistics operations. The global logistics industry was worth approximately $9.41 trillion in 2023 and is expected to exceed $14.8 trillion by 2028, with the scope of the sector expected to further expand.
From robotic automation to artificial intelligence to cloud computing, these innovations are streamlining supply chains and enabling businesses to meet rapidly evolving e-commerce needs. Meanwhile, the global air cargo services market is expected to reach $223.43 billion by 2031, growing at a CAGR of 5.8%.
With these encouraging trends in mind, let’s take a look at the fundamentals of the top Air Cargo & Shipping Services stocks, starting at No. 3.
Inventory #3: United Parcel Service, Inc. (UPS)
UPS is a leading package delivery and logistics company, offering a wide range of services including transportation, distribution, contract logistics, ocean and air freight, customs brokerage, and insurance services. It operates through two segments: U.S. Domestic Packages and International Packages.
On September 10, UPS announced plans to acquire Frigo-Trans, a prominent German-based medical logistics provider, and its sister company BPL. The acquisition is expected to significantly strengthen UPS’ capabilities in temperature-sensitive and time-critical logistics across Europe and meet the growing needs of healthcare customers.
Kate Gutman, vice president and president of International Healthcare Supply Chain Solutions, believes the acquisition will help meet the growing demand for refrigerated and frozen supply chains driven by pharmaceutical innovation.
UPS’ revenue for the second quarter ended June 30, 2024 was $21.82 billion, with revenue from supply chain solutions of $3.33 billion, an increase of 2.6% year over year. Operating income for the same period was $1.94 billion. Additionally, the company’s net income and EPS were $1.41 billion and $1.65 per share, respectively.
UPS has updated its guidance for the full year. Consolidated sales are expected to reach approximately $93 billion, with an adjusted operating profit margin of approximately 9.4%.
The consensus revenue estimate for the third quarter (ending September 2024) is $22.13 billion, representing a 5.1% year-over-year increase. Consensus EPS estimate of $1.62 for the quarter suggests year-over-year growth of 3.4%. The company has an impressive financial track record. It beat consensus EPS estimates in three of the subsequent four quarters.
Shares rose 2.9% over the past three months, closing at $131.41.
UPS’ POWR Ratings reflect this outlook. The quality of the stock is B grade. POWR ratings are calculated by considering 118 different factors, each weighted to the best degree.
Ranked 7th out of 16 stocks in the air cargo and shipping services industry. In addition to the above, we also evaluate UPS in terms of growth, value, momentum, stability, and sentiment. Get all UPS reviews here.
Stock #2: Universal Logistics Holdings (ULH)
ULH provides logistics and transportation solutions. We offer truckload services, domestic and international freight transportation, last mile and ground express services. The company serves automotive, steel, oil and gas, alternative energy, manufacturing, and other transportation companies.
ULH announced on October 2 the grand opening of a new intermodal terminal in Tacoma, Washington, strategically located to increase operational efficiency and customer convenience. The terminal has direct access to major industrial hubs and major highways, including Sumner/Kent, Puyallup/Spanaway, and Olympia/Lacey, reducing travel times, streamlining operations, and increasing service efficiency. We are aiming for
On September 30, the company acquired Parsec (Parsec, LLC, Parsec Intermodal of Canada ULC, OB Leasing, LLC), a major North American rail terminal operator. Parsec provides specialized terminal management services for time-critical container handling to Class I, regional, and short line railroads. The acquisition increases ULH’s presence in the rail terminal sector and is expected to increase the company’s contract logistics segment revenues to more than $1 billion annually.
ULH’s total operating revenue for the second quarter ended June 29, 2024 was $462.16 million, an increase of 12% compared to the same period last year. Operating revenue increased 29.4% year over year to $47.1 million. The company’s net income and EPS were $30.73 million and $1.17, an increase of 30.4% and 30% year over year, respectively. Additionally, EBITDA increased 51.9% year over year to $84.81 million.
Street expects ULH’s third-quarter sales (ending September 30, 2024) to be $463.7 million, an increase of 10.1% year over year. EPS for the upcoming quarter is expected to settle at $1.18, registering 34.1% year-over-year growth. Additionally, the company beat revenue estimates for each of the trailing four quarters, which is encouraging.
Shares have increased 79.8% over the past year, closing at $42.37.
ULH’s stance is clear in its POWR ratings. It has a B rating for Growth, Value, Stability, and Sentiment. Ranked 4th out of 16 stocks in the air cargo and shipping services industry. Click here to see ULH’s ratings on momentum and quality.
Stock #1: Radiant Logistics, Inc. (RLGT)
RLGT is a third-party logistics company that provides technology-enabled global transportation and value-added logistics solutions. We provide freight brokerage, logistics and supply chain services, including domestic, international air and ocean freight transportation services, truckload services and intermodal transportation services.
On October 2, RLGT acquired the Michigan-based Focus Logistics business, which has operated under the Radiant Service By Air brand since 2006. Following the acquisition, Focus will transition to the Radiant brand and merge with the company’s existing businesses. Detroit area. CEO Bohn Crain said the acquisition is an example of the company’s strategy to partner with logistics entrepreneurs and provide them with a built-in exit strategy.
For the fourth quarter of fiscal 2024, which ended June 30, RLGT’s revenue reached $206.03 million, and operating income rose 27.6% year-over-year to $4.88 million. The company’s adjusted net income was $7.02 million, or $0.14 per share, an increase of 8.6% and 7.7%, respectively, from the previous year. Additionally, adjusted EBITDA increased 74.3% year-on-year to $9.08 million.
Analysts expect RLGT’s first quarter sales (ending September 2024) to be $215.03 million, up 2% year-over-year, and EPS of $0.10. Further, fiscal 2025 sales and EPS are expected to reach $874.98 million and $0.42, respectively.
RLGT stock has increased 36.5% over the past six months, closing at $6.69.
It’s no surprise that RLGT has an overall rating of B, which equates to a Buy, in our proprietary rating system. It gets an A grade for sentiment and a B grade for growth and value. It ranks first in the industry.
In addition to the POWR ratings above, there are also RLGT ratings for Momentum, Stability, and Quality. Get all RLGT ratings here.
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UPS stock rose $6.59 (+5.01%) in pre-market trading Thursday. Year-to-date, UPS has fallen -13.46%. In comparison, the benchmark S&P 500 index rose 22.75% during the same period.
About the author: Shweta Kumari
Shweta’s deep interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help individual investors make educated investment decisions.
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