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Cowen Downgrades Landstar System To Market Perform

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Shares of Landstar System, Inc. (NASDAQ: LSTR) have gained more than 10 percent, year-to-date. Cowen’s Jason H. Seidl downgraded the rating for the company from Outperform to Market Perform, while reducing the price target from $64 to $63. The analyst said that sluggish trucking industry trends and potential headwinds from a major upcoming IT implementation could limit the stock’s multiples.

Landstar System has plans to begin rolling out Landstar TMS, which is expected to make the company’s agents more efficient and ultimately more profitable. Analyst Jason Seidl mentioned, however, that the process may take till 2020 to be complete, since each of the 1,300 agents needs to be upgraded individually.

Performance And Growth Opportunities

Revenue per load was weaker than expected in 1Q16, on account of worse-than-expected sequential weakness in flatbeds from January to February.

Seidl expects insurance and claims expense to lower EPS by $.03-$.05 more than management has forecasted. This may be offset partially by no incentive compensation expense for the quarter. The EPS estimate for 1Q16 has been reduced from $0.70 to $0.67. The EPS estimate for 2016 and 2017 has been lowered from $3.30 to $3.25.

The analyst believes that growth opportunities would remain organic, with the new Landstar TMS platform serving as another recruitment tool.

Latest Ratings for LSTR

Oct 2017Credit SuisseMaintainsNeutral
Oct 2017BuckinghamMaintainsNeutral
Oct 2017Wells FargoMaintainsMarket Perform

View More Analyst Ratings for LSTR
View the Latest Analyst Ratings

Posted-In: Cowen Jason H. SeidlAnalyst Color Downgrades Price Target Analyst Ratings


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