Knight Transportation Downgraded At Raymond James

In a report published Thursday, analysts at Raymond James downgraded

from Strong Buy to Outperform. The price target has been maintained at $36. The analysts believe that the upside to the price target no longer justifies the previous Strong Buy rating. However, the analysts also believe that the company offers long-term value, given its relatively young fleet and regional service center network. There are long-term growth opportunities for Knight Transportation via potential acquisitions and/or further improvements in yield. The company reported its 1Q15 results with EPS and operating income above the consensus and estimates. Although the revenue was lower than expected, 1Q15 represented the sixth consecutive quarter when the company's performance beat expectations. "Freight demand was consistent in 1Q15, with management noting it was one of the most consistent in some time. Freight demand continues to be good in April with seasonal ramp expected mid-2Q," the analysts said. Knight Transportation has raised its guidance for 2Q15 and 2015. However, the analysts believe that "[e]ven with the upward revision to guidance, we continue to view it as conservative with back half 2015 earnings averaging about 9 percent compared to 1H15 averaging 36percent." The EPS estimates for 2015 and 2016 have been raised from $1.46 to $1.50 and from $1.70 to $1.73, respectively. Raymond James expects the company to perform better than the current guidance during the latter half of the year.