UPDATE: KeyBanc Upgrades Swift Transportation Co. to Buy, Names $18 PT on Improved Earnings Potential

In a report published Monday, KeyBanc upgraded its rating on Swift Transportation Co. SWFT from Hold to Buy, and named an $18.00 price target. KeyBanc noted, “Within our coverage, SWFT has the most leverage to changes in truckload fundamentals, which we are increasingly constructive on. In addition, company-specific initiatives to improve fleet utilization and asset returns, as well as improved execution and operational focus should contribute to an improved margin profile, while increased EBITDA/cash flow generation and additional debt paydown should improve investor sentiment as deleveraging persists into 2013. These dynamics, as well as expanded dedicated, intermodal, and brokerage offerings, in our view, create the potential for improved earnings and margins despite a static fleet count, as well as continued multiple expansion in coming quarters. We believe SWFT is best suited for aggressive accounts with a higher risk tolerance.” Swift Transportation Co. closed on Friday at $13.94.