Marten Transport Has Limited Downside, Fair Valuation, Stifel Says In Upgrade

Shares of truckload carrier Marten Transport, Ltd MRTN — which operates in the U.S., Canada and Mexico — have come under pressure since its July 17 second-quarter print. 

The Analyst

Stifel analyst David Ross upgraded Marten from Sell to Hold and maintained a $21 price target.

The Thesis

Marten is witnessing solid overall demand and improved pricing as it diversifies its core business away from long-haul OTR to become "a more comprehensive provider of driver-friendly, dedicated, cost-effective intermodal and asset-light brokerage services," Ross said in a Tuesday note.

Stifel expects Marten to continue to focus on its dedicated fleet, as its limited pool of qualified truck drivers are attracted to these more driver-friendly lines, the analyst said. 

Citing better-than-expected Q2 earnings, Stifel said it has increased its estimates for the company.

Despite Marten's solid operations, with a stakeholder-friendly culture and clean balance sheet, Stifel views the valuation as fair.

"With limited downside from here and going into what we believe to be a strong fall freight season, we are stepping back to the sidelines with respect to MRTN." 

Stifel's $21 price target is based on 18.5 times its 2019 EPS estimate of $1.15.

The Price Action

Marten shares have gained about 8 percent year-to-date.

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Photo courtesy of Marten Transport.