The warehouse and logistic market is experiencing significant growth, driven by the flourishing e-commerce industry and the increasing demand for efficient and timely delivery of goods.
Given this backdrop, it could be wise to consider investing in fundamentally strong warehouse and logistics stocks, United Parcel Service, Inc. (UPS), FedEx Corporation (FDX), and AerCap Holdings N.V. (AER), which are winning the e-commerce race.
Adopting automation, digital freight forwarding, IoT, and AI in warehousing and distribution is reshaping the warehouse and distribution logistics industry. Large-scale warehouses and campuses are being built to meet the rising demand for storage and efficient inventory management. Hence, the warehousing and distribution logistics market is projected to grow at a CAGR of 6.78% by 2028.
The global air freight market is also expected to grow at a CAGR of 4.9% by 2033. The market is mainly fueled by the growing need for rapid and efficient cross-border transportation, the rise of e-commerce, the increasing global trade of goods, and ongoing technological innovations.
Given these favorable industry trends, let’s look at the fundamentals of three Air Freight & Shipping Services stocks, beginning with the third choice.
Stock #3: United Parcel Service, Inc. (UPS)
UPS is a package delivery company that provides global supply chain management solutions. The company operates through two segments, U.S. Domestic Package and International Package.
On January 8, UPS announced the completion of its acquisition of Frigo-Trans and its sister company, BPL, which provide industry-leading, complex healthcare logistics solutions across Europe.
This acquisition enhances UPS Healthcare solutions for European customers with Frigo-Trans’ temperature-controlled warehousing, which ranges from cryopreservation to ambient and pan-European cold chain transportation.
In the fourth quarter that ended on December 31, 2024, UPS’ revenues increased marginally year-over-year, amounting to $25.30 billion. The company reported non-GAAP adjusted operating profit of $3.10 million, indicating an 11.2% growth from the year-ago value. Its non-GAAP adjusted net income came in at $2.36 billion, and its non-GAAP adjusted EPS stood at $2.75, up 11.5% and 11.3% year-over-year, respectively.
Analysts expect UPS’ revenue for the fiscal year (ending December 2025) to be $89.32 billion and its EPS to grow 2.3% to $7.90. For the fiscal year 2026, its revenue is expected to increase 2.1% year-over-year to $91.10 billion.
UPS shares have surged marginally intraday to close the last trading session at $116.22.
UPS’ bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
UPS has a B grade for Quality. It is ranked #5 out of the 16 stocks in the Air Freight & Shipping Services industry. Click here to see the additional ratings for UPS (Growth, Value, Momentum, Stability, and Sentiment).
Stock #2: FedEx Corporation (FDX)
FDX provides customers and businesses with a portfolio of transportation, e-commerce, and international business services. The company operates through four segments FedEx Express; FedEx Ground; FedEx Freight; and FedEx Services.
On February 5, FDX announced the purchase of RouteSmart Technologies, a global leader in route optimization solutions. This acquisition will further enhance FDX’s efficiency across its global operations by combining RouteSmart’s leading technology solutions with FedEx’s unparalleled physical and data networks, enabling it to become the world’s largest express transportation provider.
On October 30, 2024, FDX announced the opening of a new, fully automated, state-of-the-art sorting facility at its Memphis World Hub. The 1.3 million-square-foot new hub enhances sorting efficiency and processing capacity.
FDX’s revenues for the second quarter of fiscal 2025 (ended November 30, 2024) amounted to $21.96 billion. It reported a net income of $741 million, while its non-GAAP EPS for the quarter stood at $4.05, indicating a 1.5% growth from the prior-year quarter.
The consensus revenue estimate of $21.96 billion for the fiscal third quarter (ending February 2025) represents a 1% increase year-over-year. The consensus EPS estimate of $4.72 for the same quarter indicates a 22.3% improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has gained 13.1% over the past year to close the last trading session at $267.77.
FDX’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
It also has a B grade for Quality. Within the same Air Freight & Shipping Services industry, it is ranked second. Click here to see FDX’s ratings for Growth, Value, Momentum, Stability, and Sentiment.
Stock #1: AerCap Holdings N.V. (AER)
Based in Dublin, Ireland, AER primarily leases, finances, sells, and manages commercial flight equipment. It has a portfolio of approximately 1,700 aircraft, 1000 engines, and 300 helicopters and serves approximately 300 customers worldwide.
On December 27, 2024, AER announced a sale and leaseback agreement with TAAG Angola Airlines, the national carrier of Angola, for one new Boeing 787-9 aircraft. This scheduled delivery will occur this month and should help TAAG expand its network across Africa, Europe, and Asia.
In the same month, AER announced a lease agreement with Mukamalah Aviation Company (a wholly owned subsidiary of Aramco Group), operating under the brand name Aloula Aviation, for two Boeing 737-800 aircraft. This agreement boosts AER’s brand visibility and business potential worldwide.
For the third quarter that ended September 30, 2024, AER’s total revenues and other income increased 3% year-over-year to $1.95 million. The company’s net income attributable and EPS amounted to $375.03 million and $1.95, respectively.
Street expects AER’s revenue for the fiscal second quarter (ending June 2025) to increase 2.9% year-over-year to $2.02 billion. Its EPS for the same period is expected to register a 1% growth from the prior year, settling at $3.04. In addition, it surpassed the consensus revenue and EPS estimates in three of the trailing four quarters, which is promising.
Shares of AER have gained 30.7% over the past year and 8.2% over the past six months to close the last trading session at $100.70.
It’s no surprise that AER has an overall rating of B, which equates to a Buy in our POWR Ratings system. It has a B grade for Momentum, Stability, Sentiment, and Quality. Out of 16 stocks in the same industry, AER is ranked #2.
Beyond what is stated above, we’ve also rated AER for Growth and Value. Get all AER ratings here.
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UPS shares were trading at $116.22 per share on Monday afternoon, up $0.58 (+0.50%). Year-to-date, UPS has declined -7.84%, versus a 4.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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