UPDATE: Deutsche Bank Reiterates Hold Rating, Lowers PT on Landstar System Following Lowered Q2 Revenue Guidance

In a report published Wednesday, Deutsche Bank analyst Justin Yagerman reiterated a Hold rating on

, but lowered the price target from $63.00 to $62.00. In the report, Deutsche Bank noted, “LSTR lowered its Q2 revenue guidance to $660-700 million (vs. DBe's prior estimate of $717 million and Consensus of $721 million) as the company has seen y/y revenue declines accelerate QTD vs. Q1 (down 3% y/y). As a result of the more modest top-line growth outlook, LSTR now expects Q2 EPS in a range of $0.63-0.68 (vs. prior DBe and Consensus of $0.71 and the company's previous guidance of $0.68-0.73). LSTR's expected 11-17% y/y decline in Q2 EPS includes a $0.03/share headwind from the timing of its annual agent convention which typically occurs in Q1. Flatbed has remained weak QTD, and while management expects the wind power business to pickup in June, the company is not projecting an increase in its other industrial end-markets. Although management sees slower revenue growth, gross profit margins (net revenue [gross revenue less purchased transportation and commissions] divided by gross revenue) are expected to be in a range of 16.0-16.2% and operating margins (EBIT divided by net revenue) are seen in a range of 44-46%. HOLD. Maintain Hold.” Landstar System closed on Tuesday at $53.49.