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Oppenheimer Lowers Rating On Landstar Citing Low Visibility Into Business Conditions

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Oppenheimer Lowers Rating On Landstar Citing Low Visibility Into Business Conditions
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Oppenheimer downgraded Landstar System, Inc. (NASDAQ: LSTR) to Perform from Outperform and removed its previous $70 price target.

The company reported 2Q16 EPS of $0.76 (-17 percent year-over-year), which was below the analysts' estimate of $0.81. Moreover, Landstar System's 3Q16 guidance was lighter than expectations, as it expects soft market pricing to perpetuate with readily available truck capacity in a soft freight demand environment.

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The analysts remain optimistic on the long-term prospects of the company's high-ROIC/asset-light freight brokerage business; however, they believe Landstar's business conditions remain challenged in a currently soft freight market environment and visibility into meaningful volume improvements appears low across its industrial-centric end-markets.

"LSTR currently trades at 11.2x EV/EBITDA our FTM EBITDA of $255M, which is a premium to its five-year historical FTM EV/EBITDA average of 10.4x (range of 8x-13x). We view its multiple as appropriate given current soft business conditions," wrote Oppenheimer.

At time of writing, Landstar was down 1.95 percent on the day, trading at $68.32.

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Latest Ratings for LSTR

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

View More Analyst Ratings for LSTR
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