Market Overview

Analyst: Knight-Swift Holds Upside Potential

Share:
Analyst: Knight-Swift Holds Upside Potential

The lead-up campaign around Tesla Inc (NASDAQ: TSLA)’s electric semi-truck has dented trucking stocks, but the Street remains bullish on traditional sector players.

Knight-Swift Transportation Holdings Inc (NYSE: KNX) earned its eighth Buy rating Tuesday against three Holds and one Sell.

The Rating

KeyBanc’s Todd Fowler upgraded Knight-Swift to Overweight and established a $45 price target.

Fowler maintains Sector Weight ratings on Werner Enterprises, Inc. (NASDAQ: WERN), Heartland Express, Inc. (NASDAQ: HTLD), Schneider National Inc (NYSE: SNDR) and Marten Transport, Ltd (NASDAQ: MRTN). (See Fowler's track record here.)

The Thesis

With the industry’s high rise in the dry-van spot rate index, expected acceleration in volume growth and flat to negative contract pricing since 2015, Knight-Swift could see mid-single-digit increases in 2018 contract rates coupled with margin expansion, according to KeyBanc.

“Following our review of historical valuation metrics, as well as an increasingly favorable fundamental backdrop, we are incrementally constructive with our truckload outlook,” Fowler said in a Monday note. 

Knight-Swift sits on historically high multiples, and while KeyBanc expects compression, it anticipates potential upside in valuation based on previous instances of indirect metric correlation.

Price Action

Knight-Swift’s stock had built momentum leading up to its third-quarter earnings report Nov. 6, but top- and bottom-line misses catalyzed a steep plunge in value.

Tuesday’s upgrade prompted a 2.5 percent pop, and at the time of publication, shares were trading up 1.2 percent at a rate of $38.52.

Related Links:
Economics Of Autonomy: The Big 3, Trucking And Insurance
Knight, Ryder: Here’s Buckingham’s Picks Among Transportation Names

Latest Ratings for KNX

DateFirmActionFromTo
May 2020KeyBancMaintainsOverweight
May 2020KeyBancMaintainsOverweight
Apr 2020UBSMaintainsBuy

View More Analyst Ratings for KNX
View the Latest Analyst Ratings

 

Related Articles (KNX)

View Comments and Join the Discussion!

Posted-In: KeyBanc Knight-Swift Transportation Todd FowlerUpgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
DLTHStifelMaintains6.0
CIENStifelMaintains61.0
BSMStifelMaintains12.0
LVSUBSMaintains53.0
CIUBSMaintains246.0
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