Evercore ISI Raises Old Dominion (ODFL) Target but Warns Transport Optimism is Priced In

Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is included among the 15 Dividend Growth Stocks with the Highest Growth Rates.

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On January 13, Evercore ISI expert Jonathan Chappell raised his terms people connected Old Dominion Freight Line, Inc. (NASDAQ:ODFL) to $150 from $139, portion keeping an In Line standing connected the stock. He said that a batch of the optimism astir EPS maturation implicit the adjacent 2 years is already reflected successful transport valuations, particularly aft the assemblage benefited from dense rotation and early-cycle excitement. At the aforesaid time, helium warned that if request weakens further, it could hold a existent betterment and enactment added unit connected net forecasts. In that benignant of setup, stocks tin besides spot valuation multiples compress.

That caution lines up with what the numbers person been showing. Old Dominion shares are down much than 7% implicit the past 12 months arsenic freight request has stayed brushed and the company’s exemplary has been moving against it. In the 3rd quarter, gross fell 4.3% year-over-year to $1.41 billion. Operating income dropped 10.2% to astir $361 million, and EPS declined 10.5% to $1.28.The main resistance was the weaker shipment volume. Less-than-truckload (LTL) tons per time dropped 9% versus past year, driven by a 7.9% diminution successful shipments per time and a 1.2% diminution successful value per shipment. Put simply, customers were shipping less loads, and those shipments were somewhat lighter than before.

Still, pricing has been a agleam spot. The institution said LTL gross per hundredweight (excluding fuel) accrued 4.7% year-over-year. Since a “hundredweight” is conscionable 100 pounds, this metric is fundamentally showing that Old Dominion is earning much per portion of freight adjacent arsenic volumes soften. In different words, it is moving little freight, but getting paid amended for what it does move.

Management credits pricing powerfulness to work quality. On the Q3 net call, CEO Marty Freeman pointed to a 99% on-time show complaint and a cargo claims ratio of lone 0.1%, which signals precise debased freight damage. With consistency similar that, galore customers are consenting to wage up for reliability.

Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is simply a starring less-than-truckload carrier, providing determination and nationalist LTL shipping services done a azygous integrated, non-union network.

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