Market Overview

Oppenheimer Lowers Rating On Landstar Citing Low Visibility Into Business Conditions

Share:
Oppenheimer Lowers Rating On Landstar Citing Low Visibility Into Business Conditions

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.

Related Link: RBC Questions The "Urbanization" Movement Impact To Transport Names

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.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for LSTR

DateFirmActionFromTo
Aug 2020Goldman SachsUpgradesSellNeutral
Jul 2020Morgan StanleyMaintainsUnderweight
Jul 2020Credit SuisseMaintainsNeutral

View More Analyst Ratings for LSTR
View the Latest Analyst Ratings

 

Related Articles (LSTR)

View Comments and Join the Discussion!

Posted-In: OppenheimerAnalyst Color News Downgrades Travel Analyst Ratings Movers General

Latest Ratings

StockFirmActionPT
WPMScotiaBankMaintains55.0
NPIScotiaBankMaintains39.0
MRUScotiaBankMaintains66.0
LUGScotiaBankUpgrades14.0
JWELScotiaBankMaintains37.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com