UPDATE: Stifel Nicolaus Downgrades Werner Enterprises to Hold on Valuation

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In a report published Friday, Stifel Nicolaus analyst John Larkin downgraded the rating on Werner Enterprises WERN from Buy to Hold, and removed the $26.00 price target.

In the report, Stifel Nicolaus noted, “We are downgrading the shares of Werner Enterprises from Buy to Hold on the basis of valuation, as we believe the potential for market outperformance from here is limited, even if the stock should go higher (our 12-month target price prior to this downgrade was $26, or 15.0x our 2015 EPS estimate of $1.70). Relative to 12-month target price prior to the downgrade, the company's shares showed ~3% upside over the coming year, not enough upside, in our view, to maintain our Buy rating. Furthermore, Werner's shares are currently trading at 16.5x our 2014 EPS estimate, somewhat above the average 2014 EPS multiple of the asset-based truckload carriers of 15.6x (note: excludes J.B. Hunt, which is much more an intermodal marketing company as its one-way truckload segment has been de-emphasized over the past decade—although it's dedicated segment continues to grow—and whose shares appear somewhat overvalued to us).”

Werner Enterprises closed on Thursday at $25.14.

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Posted In: Analyst ColorDowngradesAnalyst RatingsJohn LarkinStifel Nicolaus
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