On Friday, Stifel analysts adjusted their outlook on Knight Transportation shares (NYSE: NYSE:KNX), raising the price target significantly from $48.00 to $57.00, while reiterating a Hold rating on the stock. The revision followed Knight-Swift's latest earnings report, where the transportation company reported an adjusted earnings per share (EPS) of $0.36. With a current market capitalization of $9.25 billion and analyst targets ranging from $48 to $70, the stock has garnered significant attention. According to InvestingPro, five analysts have recently revised their earnings expectations upward for the upcoming period. This figure beat both the Street consensus and Stifel's own forecast by $0.03 and $0.04, respectively.
Despite the earnings surpassing expectations, Knight-Swift's adjusted earnings before interest and taxes (EBIT) fell short of Stifel's projections by approximately 2.5%. The discrepancy was attributed to a combination of factors. On one hand, strong operational expense control in the company's flagship trucking unit contributed positively, helping maintain a gross profit margin of 24.34%. On the other hand, this was counterbalanced by the increased costs associated with the expansion of their less-than-truckload (LTL) network and upfront integration expenses at DHE. InvestingPro data shows the company achieved revenue growth of 3.76% in the last twelve months, despite challenging market conditions.
The financial results revealed that the shortfall in operating income was slightly more than compensated for by lower net interest expenses and a reduced effective tax rate. The Stifel analysts found the Truckload margin performance commendable, especially given the current rate environment. This led to a more optimistic view that the freight market might be heading towards improvement.
The analysts, however, expressed caution with regard to the company's valuation, suggesting that it reflects a high level of investor expectation. This aligns with InvestingPro's analysis, which indicates the stock is slightly overvalued at current levels, trading at a P/E ratio of 78.83. They indicated that substantial improvements in volume and pricing fundamentals would be necessary to justify the current trading levels of Knight Transportation's stock. As a result, the firm chose to maintain its Hold rating, signaling a neutral stance on the stock's investment prospects at the current price. For a deeper understanding of KNX's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Knight Transportation, a trucking company with a market capitalization of $9.29 billion, has seen a flurry of activity from analysts following their fourth-quarter results. TD Cowen analysts raised the company's stock target to $65, maintaining a Buy rating, following the company's robust earnings and revenue growth of 7.54% in the last year. UBS analyst Thomas Wadewitz also increased the price target for Knight Transportation shares to $63.00, keeping a Buy rating. Similarly, Evercore ISI analyst Jon Chappell raised the price target for Knight Transportation to $62, maintaining an In Line rating.
These adjustments follow Knight Transportation's impressive fourth-quarter earnings per share (EPS) of $0.36, which exceeded analysts' consensus estimate of $0.33. The company's truckload operating ratio (OR) performance, standing at 92.2%, indicates effective cost management and efficiency improvements.
Looking ahead, Knight Transportation's guidance for the first and second quarters of 2025 aligns with consensus estimates. Evercore ISI revised its 2025 EPS estimate for Knight Transportation to $2.06 from $2.00 and the 2026 forecast to $3.27 from $3.20. These are recent developments that highlight the company's financial performance and the positive outlook provided by analysts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.