EXPD's share price bounced of 52-week lows as transportation stocks recovered. The industry in which EXPD competes is highly cyclical, because revenues are impacted by shipping rates that fluctuate with business cycles. The Fed cutting interest rates substantially and Congress announcing tax-rebates boosted the chance that the U.S. economy would recover.
Oil prices hit $100 per barrell. Transportation stocks sank as worries over the consumer mounted. Prices at gas stations, a weakening housing market, and rising unemployment appears to be huring consumer demand at stores. With less goods going off the shelf, trucking and logistics firms are shipping less goods, which hurts revenue.
Holiday traffic at many retail locations were down to flat for many retailers. EXPD derives a good portion of revenue from delivering shipments that end on shelves in many retail centers around the US.
An analyst at Robert W. Baird downgraded the stock citing valuation concerns. EXPD had run-up prior to the 3rd quarter '07 earnings. While, the analyst expects EXPD to continue gaining market share from competitors and benefit from growing international shipping, there is concern over freight services declining with a slowdown in the US economy.
