UPDATE: Citigroup Downgrades Knight Transportation to Neutral on Freight Slowdown and Costs

Citigroup reduced its rating on Knight Transportation

from Buy to Neutral and lowered its price target from $18 to $16. Citigroup noted, "We are lowering ratings on … Knight to Neutral, from Buy, as rising operating expenses are too big a challenge to overcome in a soft freight environment. While some of the issues facing TLs are shorter term in nature and may improve as we enter a seasonally stronger period for freight in late 3Q and 4Q, multiple cost headwinds appear to be more structural in nature and seem likely to prevent meaningful EPS growth in nearly all scenarios absent a sharp and sustained pick up in the economy." Knight Transportation closed at $15.34 on Thursday.