Expeditors International of Washington (EXPD) can offset pressure from lower ocean rates as growth in customs and other services continues and technology-driven productivity gains begin to materialize, UBS said in a note Monday.

The company's Q3 customs and other net revenue growth of 17% showed the company is "converting trade and tariff complexity into growth," according to the note.

UBS said its checks indicate "a clear opportunity" for Expeditors to use new technologies in forwarding and customs brokerage. Even a 5% headcount cost reduction by 2027 would put earnings per share about 8% above consensus, analysts said.

UBS raised its 2027 EPS estimate to $6.90 from $6.58, upgraded its rating to buy from neutral, and lifted its 12-month price target to $166 from $138.

Shares of the company were up 2.9% in recent trading Monday.

Price: 142.49, Change: +4.07, Percent Change: +2.94