Stifel On Knight Transportation: Upgraded To Buy On 'Growing Logistics Business'
Analysts at Stifel upgraded Knight Transportation Inc (NYSE: KNX) from Hold to Buy this Friday, citing potential upside for the stock for the first time in quite a while. Analysts like the company’s management team and its growth prospects.
Multiple Avenues For Growth
Knight has been growing earnings at a compound annual growth rate (CAGR) of 16 percent since 2009, a number which has impressed Stifel analysts. In addition, the company has pursued multiple channels of growth via acquisitions such as Barr-Nunn and via development of internal segments such as KoolTrans, Intermodal and Logistics.
Despite the strong growth initiatives, analysts like that Knight has maintained a healthy balance sheet. The company has a low net debt/EBITDAR ratio (0.5), a high ROIC (14.6 percent) and a low operating ratio (85.2 percent). Analysts note that each of these numbers are above-average compared to Knight’s peer group.
Analysts note that Knight's stock may appear fairly valued on an absolute level, but that it is historically undervalued when compared to the broader S&P 500. The stock’s PE of about 18.4 is in the middle of its historical range. However, its 15.9 percent premium to the broader S&P 500 is near a ten-year low.
Knight is also trading at a discount to the overall truckload space based on historical performance.
Analysts revised their 2016 and 2017 EPS estimates for Knight from $1.70 to $1.68 and from $2.00 to $1.95, respectively. Analysts are now predicting year-over-year revenue growth for 2015, 2016 and 2017 at 20.6 percent, 13.8 percent and 15.1 percent, respectively.
Stifel has a $35 price target on Knight’s stock.
Latest Ratings for KNX
|Feb 2017||Stifel Nicolaus||Upgrades||Sell||Hold|
|Dec 2016||Stifel Nicolaus||Downgrades||Hold||Sell|
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