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On Wednesday, Benchmark analyst Chris Kuhn revised the price target for Saia Inc. (NASDAQ: NASDAQ:SAIA) to $450 from the previous $560, while still recommending the stock as a Buy. This comes as InvestingPro data shows the stock has experienced significant volatility, with notable declines over the past week and month. Kuhn's assessment acknowledges Saia's continued volume growth outpacing that of its peers in the early months of 2025, a success attributed to the company's strategic investments in expanding its terminal network. The company maintains strong financial health, with liquid assets exceeding short-term obligations and operating with moderate debt levels. In 2024, Saia added 21 new terminals, bringing its total to 214, a move aimed at enhancing service capabilities.
Kuhn noted that Saia's quarter-to-date tonnage growth of 13% year-over-year exceeds Benchmark's initial estimate of 9.7% for the first quarter. The adjustment in the price target and earnings estimates comes in light of a slower-than-expected seasonal increase in March and uncertainties surrounding demand due to tariffs. Despite a deceleration in shipment growth, Saia has seen an increase in weight per shipment, an outcome of its efforts to diversify and handle heavier freight volumes following the recent terminal expansions. InvestingPro analysis reveals the company has maintained profitability over the last twelve months and shows strong returns over both five- and ten-year periods, demonstrating consistent long-term performance.
Saia's first-quarter operating ratio (OR) guidance suggests a sequential increase of 30-50 basis points, which Kuhn points out is less favorable than typical seasonal patterns. This deviation is partly due to the significant number of terminals opened last year. InvestingPro subscribers have access to detailed analysis showing the stock is currently trading at a high P/E ratio relative to its near-term earnings growth potential. Nonetheless, the analyst remains optimistic about Saia's long-term growth prospects, especially with the acquisition of Yellow (OTC:YELLQ) terminals poised to enhance service and density, and thereby enable Saia to capture market share, improve pricing, and narrow the OR gap with competitors like ODFL over time.
The recent market pullback has, according to Kuhn, led to a more attractive valuation of Saia's stock at 18.7 times the firm's 2026 earnings estimate, slightly below the five-year average. However, due to the impact of unusual weather events in the first quarter and a lower seasonal build in March, there is an expectation that the OR deterioration could align with the higher end of the provided guidance. InvestingPro data indicates that six analysts have recently revised their earnings estimates downward for the upcoming period, though the company is still expected to remain profitable this year. Consequently, Benchmark has reduced its earnings per share (EPS) forecasts for the first quarter, as well as for the full years of 2025 and 2026. The new target price reflects these adjusted multiples and earnings expectations amid the ongoing tariff uncertainty.
In other recent news, Saia Inc. reported significant growth in its less-than-truckload (LTL) shipments and tonnage for the early months of 2025. The company saw a 6.8% rise in LTL shipments per workday in January and a 13.8% increase in tonnage, with February continuing the trend with a 4.2% increase in shipments and a 12.2% boost in tonnage. Additionally, Saia's weight per shipment grew by 6.5% in January and 7.6% in February. Analyst firms have taken note of Saia's performance, with BMO Capital Markets upgrading the stock to 'Outperform' and setting a price target of $455, citing the company's strong operating leverage and management team. Stifel also upgraded Saia to a Buy rating with a $524 target, highlighting its growth potential in geographic expansion and market share. Meanwhile, Benchmark maintained its Buy rating with a $560 price target, acknowledging Saia's solid earnings and shipment growth despite higher expenses. The analysts have expressed optimism about Saia's ability to capitalize on industry dynamics and improve its operational efficiency. These developments reflect a positive outlook for Saia in the transportation sector.
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