EXPD Expeditors International of Washington Inc

We have downgraded our recommendation on Expeditors International (EXPD) to Underperform, given a lackluster performance in its first quarter. The company's adjusted earnings missed the Zacks Consensus Estimate and deteriorated from the year-ago level.

A dull revenue performance in air and ocean freight segments was primarily responsible for the underperformance. Total revenue was also lower than expected, given an unfavorable demand trend.

We remain concerned about the macroeconomic environment that continues to affect global demand trends, thereby hurting Expeditors' performance. Hence our Underperform rating with a price target of $35, based on 19.6x our earnings estimate for 2012.
 
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