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On Monday, Benchmark analyst Chris Kuhn adjusted the price target for Schneider National (NYSE:SNDR) shares, reducing it to $31 from the previous $34, while still recommending a Buy rating for the stock. This adjustment comes as the stock has fallen significantly over the past three months, with shares currently trading at $22.30. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value model, despite trading at a relatively high P/E ratio of 40.4x. Kuhn noted that market conditions have shifted since Schneider National reported first quarter results. The expected March seasonal build was lower than usual, and concerns over tariffs have introduced uncertainty into freight market projections. Additionally, the typical increase in activity during the second quarter is now in doubt.
The truckload (TL) market is currently witnessing weak demand due to these factors. Despite this, Schneider National’s Dedicated business segment has been navigating through some churn in the first and second quarters. With a solid current ratio of 1.58 and moderate debt levels, the company maintains strong financial flexibility. The recent acquisition of Cowan is reported to be progressing positively. Kuhn remarked that while spot rates, load-to-truck ratios, and tender rejection rates have declined from earlier in the year, they have remained relatively stable. This could be a result of a slight advance in demand ahead of the anticipated tariffs.
Intermodal volumes, which have been robust, are beginning to show signs of slowing down. Pricing in this segment continues to be restrained. Kuhn emphasized a cautious approach to the current market turbulence, making adjustments to estimates and price targets as necessary, but without altering the overall positive rating on the company’s stock.
Kuhn’s comments reflect a careful reassessment of Schneider National’s financial outlook in light of the recent changes in the freight and logistics industry. Despite the lowered price target, the Buy rating indicates a continued confidence in the company’s performance amidst the challenges. Schneider National’s ability to manage its Dedicated business and the integration of Cowan’s operations appear to be key factors in maintaining this positive outlook.
In other recent news, Schneider National reported its fourth-quarter 2024 earnings, showing an earnings per share (EPS) of $0.20, which aligned with analyst expectations. However, the company slightly missed its revenue forecast, posting $1.34 billion compared to the anticipated $1.35 billion. Despite the revenue shortfall, Schneider National demonstrated strong operational efficiency with a 40% increase in adjusted income from operations, reaching $45 million. The company also highlighted its acquisition of Cowen Systems, which is expected to enhance fleet capabilities and contribute to future growth.
Stephens research firm recently adjusted its outlook on Schneider National, reducing the price target from $32.00 to $30.00 while maintaining an Equal Weight rating, following the company’s earnings report. The firm noted the decline in Schneider’s legacy truck count but acknowledged the company’s plan to add several hundred trucks to its dedicated business segment. Stephens anticipates improved freight conditions and a recovery in earnings per share in the latter half of 2025. Schneider National’s strategic focus includes growth in intermodal and cross-border operations, with expectations for profitability in its truckload network in the second half of 2025.
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