Expeditors International of Washington (EXPD) is expected to deliver better-than-expected Q2 due to rising airfreight rates and improving shipping volumes, UBS said in a note Thursday.

UBS analysts expect EPS of $1.86, up from $1.75 previously, and about 13% above consensus estimate, the note said. The Q2 results are due on Aug. 4.

Spot airfreight rates increased 23% year-over-year in April and 33% in May, with strength continuing into June, the report said.

The analysts now forecast 11% growth in airfreight net revenue per ton, compared with a 2% decline in Q1, and 5% volume

growth, resulting in 16.5% airfreight net revenue growth.

Rising air and ocean rates provide more visibility to EPS growth and support a modestly higher price-earnings ratio, they said.

"We expect a strong Q2 and rising H2 and 2027 EPS expectations and we believe upside potential for EXPD stock is attractive," the report said.

UBS raised its price target to $191 from $175 while keeping its buy rating.

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