DHL Group: Lifting estimates and PT

We update our FY26/27 EBIT estimates to EUR 7.06bn/7.49bn which stand ~2% above company compiled consensus. Our higher estimates reflect: i) recent company comments around Express weight growth in Q3 not too dissimilar from Q2 levels; ii) UBS Evidence Lab UBS transponder data showing low single digit capacity growth y/y in Q3 - which we believe supports Express Q3 contribution margin; iii) we give more credit to the heavy weight campaign supporting Express weight growth in 4Q and 1Q27; iv) we expect a favourable backdrop for letter price increases FY27/28 with a regulator decision expected in Q4. We lift our price target to EUR 59.5/sh (prior EUR 54.5/sh). On our estimates DHL trades on 14.5x P/E ratio (historical average 13.5x, peak multiple 16.5x), on a ~5% FCF yield and 3.7% dividend yield. With limited valuation upside to our fair value we rate the stock Neutral.