Raymond James Cuts Forward Air Price Target By 7%

Raymond James Cuts Forward Air Price Target By 7%
  • Raymond James analyst Patrick Tyler Brown lowered the price target for Forward Air Corp FWRD to $135 (an upside of 50%) from $145 while maintaining the Strong Buy rating on the shares.
  • The analyst states that the sharp decline in truck spot rates has continued to dominate headlines — as per data, it is estimated that current truck spot rates per mile have fallen back to "peak" 2014 levels.
  • Brown believes that the truck spot market has been at the epicenter of a well-documented shift from goods to services spending — all while truckload operating costs have increased starkly.
  • The analyst maintains the rating reflecting on a strong mid-quarter update that exhibited exceptional pricing, tonnage holding its own, and an expectation that they will beat the high end of their guidance range.
  • Brown continues to be impressed with FWRD's efforts to improve revenue quality by removing loose/over-sized/non-palletized freight in favor of higher-value/denser freight.
  • He adds that its asset-light approach provides an appealing FCF profile, resulting in a good risk/reward skew.
  • Price Action: FWRD shares are trading higher by 2.38% at $89.45 on the last check Friday.

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