UPDATE: J.P. Morgan Upgrades Knight Transportation on Rising Probability of Acquisition-Driven Growth

In a report published Monday, J.P. Morgan analyst Thomas R. Wadewitz upgraded the rating on Knight Transportation KNX from Neutral to Overweight, and raised the price target from $17.00 to $22.00. In the report, J.P. Morgan noted, “We believe that conditions have become increasingly favorable for KNX to execute an acquisition and we anticipate that the response of KNX stock would be similar to what occurred when HTLD acquired Gordon Trucking – a sharp step up in response to a deal that would support EPS growth for multiple years. In developing our view based on a potential acquisition, we recall the logic of Wayne Gretzky – ‘Skate to Where the Puck Will Be' (not to where it is now). We are raising our rating to Overweight from Neutral on a view that the environment is more favorable for truckload acquisitions and as one of the best positioned potential buyers, KNX is likely to realize an acquisition over the next several quarters. We note that our call is not based on the proposed USAK deal but on the potential for other acquisitions.” Knight Transportation closed on Friday at $17.87.