On Monday, BMO Capital maintained its Market Perform rating on Saia Inc. (NASDAQ: NASDAQ:SAIA) but increased the price target for the company's shares to $495 from the previous $465. This adjustment reflects a forward-looking valuation based on financial forecasts for the years ahead.
The firm's analysis indicated that Saia's recent financial results were largely consistent with their projections, albeit slightly below the consensus. The company's strategic investments throughout the current year are expected to set up Saia for success in fiscal year 2025, with the anticipation of improved margins at new terminals and growth that surpasses the industry average.
BMO Capital revised its earnings per share (EPS) estimates for Saia, raising the forecast for fiscal year 2025 to $15.76, up from the prior estimate of $15.43. However, the EPS estimate for fiscal year 2026 was adjusted downward to $18.86 from the previous forecast of $19.16.
The rationale for the price target increase to $495 is based on rolling forward the valuation base to fiscal year 2026. The Market Perform rating indicates that BMO Capital views Saia's stock as likely to perform in line with the broader market.
In other recent news, Saia Inc. has been the subject of several significant developments. The company's third-quarter earnings report revealed earnings per share (EPS) of $3.46, surpassing Evercore ISI's projection of $3.36 but falling short of the average forecast of $3.53. Despite mixed signals, Saia's revenue per shipment showed an increase, suggesting potential for greater margin gains.
Several analyst firms have updated their ratings and price targets for Saia. Evercore ISI increased its price target to $522 from $488 and maintained an Outperform rating. Jefferies raised Saia's price target to $525 from $500, while Wolfe Research upgraded Saia's stock to an Outperform rating. Citi initiated a Buy rating, and Benchmark maintained a Buy rating. However, TD Cowen maintained a Hold rating on Saia shares.
Saia reported a record revenue of $823 million in its second quarter, marking an 18.5% year-over-year increase, and operating income rose by 14.4% to $137.6 million. The company is also expanding its network, with plans to open 11 additional terminals in the third quarter.
InvestingPro Insights
To complement BMO Capital's analysis, recent data from InvestingPro offers additional context on Saia Inc.'s financial position and market performance. The company's market capitalization stands at $12.25 billion, with a P/E ratio of 32.95, indicating a premium valuation relative to earnings. This aligns with an InvestingPro Tip noting that Saia is "Trading at a high earnings multiple."
Saia's revenue growth remains robust, with a 13.83% increase over the last twelve months as of Q3 2024, reaching $3.17 billion. The company's profitability is also noteworthy, with an operating income margin of 15.59% for the same period. These figures support BMO Capital's positive outlook on Saia's potential for above-industry-average growth.
Investors should note that Saia has demonstrated strong market performance, with a 34.1% price total return over the past year. An InvestingPro Tip highlights a "Significant return over the last week," which was 9.25%, potentially reflecting market optimism about the company's prospects.
For readers seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Saia, providing deeper insights into the company's financial health and market position.
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