On Thursday, Stifel adjusted its stance on Schneider National (NYSE:) stock, downgrading it from Buy to Hold and setting a price target of $25.00.
The transportation company, known for its trucking and logistics services, saw some positive trends in the second quarter of 2024, such as a return to normal demand patterns and a temporary tightening of capacity during the summer holidays. However, persistent weak rates across Schneider’s portfolio have continued to impact the company’s financial performance.
Despite these challenges, Schneider National reported earnings per share (EPS) of $0.21, surpassing both the consensus estimate of $0.18 and Stifel’s own prediction of $0.20.
This beat was attributed to better-than-expected operating ratios (ORs) in all three business segments. Nevertheless, similar to its industry peers, Schneider’s management had not fully anticipated the extent and persistence of the current rate trough, which led to a downward revision of the full-year 2024 EPS guidance.
Stifel’s outlook for Schneider remains cautiously optimistic, anticipating a gradual and sequential improvement towards the end of the year. This improvement is expected to be supported by cost control measures and productivity gains in the second half of 2024.
However, with Schneider’s stock having risen approximately 10% year-to-date and the anticipated market turnaround continuing to be delayed, Stifel has decided to adopt a more conservative approach.
The firm believes there are other opportunities within the sector that present more relative upside potential, prompting the downgrade to a Hold rating.
In other recent news, Schneider, a prominent transportation and logistics services company, reported an enhancement in earnings and margins in its second quarter 2024 earnings call. This improvement was observed across its truckload, intermodal, and logistics segments.
Schneider has revised its full-year adjusted diluted earnings per share (EPS) guidance to a range of $0.80 to $0.90, a decision influenced by positive market indicators and somewhat delayed earnings recovery due to less than anticipated contract price increases and volume impacts.
Furthermore, Schneider has been focusing on customer experience, cost containment, and capital optimization while maintaining a conservative leverage strategy and exploring strategic acquisition opportunities.
The company has also reported $13 million in share repurchases and $17 million in dividends paid in Q2,…
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