Market Overview

Stifel Upgrades Landstar On Expected Volume Growth, Yields, Agent Recruitment


Landstar System, Inc. (NASDAQ: LSTR) missed earnings-per-share estimates last quarter, but Stifel Nicolaus considers its performance better than the bottom line suggests.

The Rating

Stifel analyst Bruce Chan upgraded Landstar to Buy and raised his price target from $123 to $128.

The Thesis

Elevated insurance and claims costs from earlier claims compounded increased accident severity to depress shares about 6 cents.

“We don't adjust for lumpy claims because it's part of the trucking business, but we note that operationally, Landstar's results are consistent with the generally robust freight environment that others are seeing, and management is doing a good job with the aspects of the business that it controls directly,” Chan wrote in a note.

At the same time, revenue per load exceeded guidance, and recruitment for business capacity operators saw the highest ever year-over-year net increase.

Stifel expects volume growth, yields and the pipeline for new agents to be strong throughout the second half.

“Landstar is a solid operator with better access to capacity than most asset-light players in a historically tight market, in our view,” Chan said. He raised 2018 and 2019 EPS estimates from $5.80 and $6.45 to $5.98 and $6.63, respectively.

Price Action

Landstar shares closed up less than 1 percent at $108.90.

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Posted-In: Bruce Chan Stifel NicolausAnalyst Color Upgrades Price Target Analyst Ratings


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