DHL Group: Pessimistic forecasts, but shares are rising - financial experts are optimistic.

DHL Group: Pessimistic forecasts, but shares are rising - financial experts are optimistic.

According to a report from www.finanzen.net, the logistics group DHL Group is more pessimistic about the current year and medium-term business development. The economic recovery is being delayed, which is why the operating profit of the DAX group in 2023 will not be as high as previously assumed. Management also no longer expects to earn as much operationally as it did in the record year of 2022 by the middle of the decade.

Despite the weaker third quarter and the lowered forecasts, DHL shares stabilized and even rose by around three percent. Despite the weak economy, management plans to stick to the share buyback program and wants to buy back 1.2 billion euros by the end of next year.

For 2025, management now expects earnings before interest and taxes (EBIT) of between 7 and 8 billion euros. The forecast for the current year was lowered to 6.2 to 6.6 billion euros. In addition, DHL's sales fell by almost a fifth in the third quarter, mainly due to the downturn in the freight business.

With regard to the letter business, Deutsche Post notes that the volume of letters has fallen by 6.2 percent compared to the previous year. The decline accelerated during Corona times and it is not expected that the mail business will return to its previous level. However, the Post and Parcel Germany sector still has a positive vision and wants to shape itself in the coming years so that it is primarily about parcels.

Despite the lowered forecasts and the declining letter volume, the DHL Group was able to enter the trading market with a positive spin. The shares rose by 3.21 percent to 38.32 euros, which shows that confidence prevails and that the forecast reduction had no lasting negative impact on the market.

The entire financial sector may be weakened due to the delayed economic recovery and the declining volume of letters. It could lead to lower profitability in the freight business as well as a decline in sales in logistics services. Furthermore, investing in DHL shares could become less attractive if earnings forecasts are further reduced. It remains to be seen how the logistics industry and financial markets will respond to the challenges and changes resulting from these forecasts.