On Thursday, Benchmark analyst adjusted the stock price target for Schneider National (NYSE: NYSE:SNDR), a leading transportation and logistics services company, to $32.00, up from the previous target of $30.00. The firm maintained its Buy rating on the company's stock.
The revision follows Schneider National's third-quarter earnings, which fell short of expectations. The company had a strong finish to the season in June, extending into July, but this momentum did not carry through from mid-August to the end of the quarter. Benchmark had previously reduced their fourth-quarter and full-year 2025 forecasts due to a delay in the anticipated recovery.
Schneider National's adjusted operating income was reported at $44.3 million, which did not meet Benchmark's expectation of $56.8 million. This shortfall was attributed in part to a $10 million increase in auto liability insurance costs. Despite these challenges, the Dedicated business segment showed resilience, and the Intermodal segment demonstrated sequential improvement.
The company anticipates stabilization in most of its business areas in the fourth quarter, along with improved seasonality within its Truckload Network and Logistics segments. However, the full-year 2024 guidance has been adjusted downward due to the lower-than-expected base in the third quarter and delays in Dedicated account start-ups.
Benchmark's maintained Buy rating is supported by the potential for increased domestic manufacturing and reduced corporate taxes following the recent election, both of which are expected to positively impact the freight industry.
Moreover, Benchmark sees an opportunity for substantial margin improvement in Schneider National's Truckload segment, noting that even achieving near breakeven results would represent a significant turnaround from the current negative operating income.
In other recent news, Schneider National has been in the spotlight with BofA Securities upgrading the company's rating from Underperform to Buy and raising the price target to $34, reflecting a positive outlook following recent developments. The revised price target is based on a price-to-earnings ratio of 29.0 times the estimated earnings for 2025.
However, BofA Securities has also reduced its earnings per share estimates for 2024 and 2025 due to weaker than expected performance in the third quarter. On the other hand, Schneider National reported steady revenues of $1.2 billion in its Third Quarter 2024 Earnings Conference Call.
Evercore ISI, another analyst firm, has reduced Schneider National's price target from $27.00 to $26.00 while retaining an In Line rating. This adjustment follows Schneider National's third-quarter earnings report, which disclosed an adjusted earnings per share of $0.18, falling short of projections.
Among these recent developments, Schneider National continued its share repurchase program with $4 million in purchases, indicating the company's commitment to shareholder returns, strategic growth, and operational efficiency. These are some of the recent developments regarding Schneider National.
InvestingPro Insights
Recent InvestingPro data provides additional context to Schneider National's (NYSE: SNDR) financial performance and market position. Despite the challenges highlighted in the article, the company's stock has shown significant momentum, with a 38.49% price total return over the past six months and a 39.92% return over the last year. This aligns with an InvestingPro Tip indicating that SNDR has seen a "Significant return over the last week" and is "Trading near 52-week high."
However, investors should note that the stock's P/E Ratio (Adjusted) stands at 54.7, which an InvestingPro Tip describes as "Trading at a high earnings multiple." This valuation metric suggests that the market may have high expectations for future growth, despite the recent earnings miss and downward guidance adjustment mentioned in the article.
On a positive note, Schneider National has "raised its dividend for 3 consecutive years," according to another InvestingPro Tip. This commitment to shareholder returns, coupled with a current dividend yield of 1.25%, may provide some stability for investors during this period of operational challenges.
For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips for SNDR, which could provide valuable insights into the company's financial health and market position.
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