UPDATE: Stifel Nicolaus Upgrades Knight Transportation to Buy on Valuation

Stifel Nicolaus raised its rating on Knight Transportation KNX from Hold to Buy and established a price target of $18 a share. Stifel Nicolaus commented, "We think that the company should be able to consistently grow EPS at an annual rate between 11% and 14%, slightly below its long promised 15%+ annual rate. Investors seem to have finally absorbed the notion of slower growth for Knight Transportation and the lower valuation multiples that accompany slower growth (note: the company is currently trading at 14.7x our 2013 EPS estimate whereas over the past five years the company traded at an average FY2 PE multiple of 19.7x). However, the re-tooled growth trajectory is still respectable, in our view, and will be largely driven by expansion of its newer asset-lighter businesses, thereby enabling the company to maintain its debt free status." Knight Transportation closed at $14.97 on Monday.