Why Credit Suisse Upgraded Echo Global

Shares of Echo Global Logistics, Inc. ECHO rose more than 2 percent on Tuesday trading, after Credit Suisse analysts Allison M. Landry, Daniel Schuster and Kenneth Ryan upgraded the stock from Neutral to Outpefrom. The experts also raised their price target from $27.00 to $39.00 on the back of higher base year EBIT, which leaves an upside of approximately 17 percent from current levels.

Following the finalization of the Command acquisition, the firm increased its 2015 EPS estimate from $0.98 to $1.03, its 2016 estimate to $1.40, and its 2017 forecast to $1.67 (from $1.17 and $1.36, respectively).

The rationale behind the newfound bullishness stems on:

1) The substantial increase in lane density and scale that the Command acquisition gives Echo allows it company to increase its market share, buy capacity more efficiently, and thus, lower costs

2) “The expanded geographic footprint should drive increased wallet share with existing customers, and generate opportunities for cross-selling synergies”

3) The logistics company “will be able to leverage the combined technological platform –a key advantage over large incumbents in the truck brokerage market.”

In addition, Credit Suisse expects Echo to release new long-term revenue and EBITDA targets along with its second quarter financial results, scheduled for July 23. “Whereas prior to the acquisition of Command the path to the company's

2017 financial targets appeared ambitious, the acquisition vaulted ECHO to targets that are now well ahead of plan,” the analysts conclude.