UBS upgraded Expeditors International (NYSE: EXPD) from Neutral to Buy and raised its price target to $166, pointing to productivity improvements and revenue resilience in the face of lower ocean freight rates.

The firm said it expected growth in customs and other services to offset pressure from declining ocean rates in 2026. UBS also highlighted the company's long-term potential to achieve meaningful productivity gains through technology integration and process optimization.

UBS increased its 2027 EPS estimate for Expeditors to $6.90 per share from $6.58 (above the $6.39 consensus) to reflect initial efficiency benefits—representing roughly half the annual productivity achieved by peer CH Robinson over the past three years. The analysts also modeled a 4% rebound in net revenue.

At 24x projected earnings, UBS said Expeditors' current valuation implied roughly $950 million in EBIT for 2027, compared with its forecast of $1.13 billion, suggesting the stock remained undervalued. The firm noted that investor sentiment was cautious due to weak ocean pricing, with most analysts maintaining Neutral or Sell ratings.