In a report published Tuesday, J.P. Morgan analyst Thomas R. Wadewitz reiterated an Underweight rating on Arkansas Best ABFS, and raised the price target from $8.00 to $13.00.
In the report, J. P. Morgan noted, “On Monday night details of ABFS's tentative contract agreement with the Teamsters were released. In the agreement wages are cut 7% in the first year and ABFS also benefits from a one week reduction in vacation time. These cost cuts provide a meaningful boost to EPS assuming that the contract is approved. We believe that ABFS stock is already reflecting anticipated benefits from the new contract and we also note that there is uncertainty regarding whether or not the contract will be ratified by membership.”
Arkansas Best closed on Monday at $17.74.
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