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Investing.com - Benchmark has reiterated its Buy rating and $360.00 price target on Saia Inc. (NASDAQ:SAIA), despite the less-than-truckload (LTL) carrier facing operational challenges throughout the year. Currently trading at $300.08, the stock sits between analysts’ targets ranging from $250 to $405. According to InvestingPro analysis, Saia’s current market valuation appears fairly valued.
The research firm noted that Saia has experienced limited yield growth and maintains one of the highest operating ratios among its non-union LTL peers, contributing to the stock’s underperformance compared to the broader transport sector. InvestingPro data shows the company maintains moderate debt levels with a debt-to-equity ratio of 0.18, while its current ratio of 1.49 indicates healthy liquidity.
Benchmark attributed the operating ratio pressure primarily to the ramp-up of 21 new terminals opened in 2024, combined with the weak freight environment, while noting these initially unprofitable sites showed improvement and moved toward profitability in the second quarter.
The firm reported that third-quarter volumes are running ahead of expectations, prompting modest upward revisions to its third-quarter and fiscal year 2025 estimates, though its 2026 earnings per share forecast remains unchanged.
Benchmark compared Saia’s situation to railroads from over a decade ago, suggesting investors should consider buying the carrier with the worst operating ratio on the expectation it will improve, while emphasizing that Saia must demonstrate operating ratio progress in coming quarters to validate its terminal expansion strategy.
In other recent news, Saia Inc. reported a decline in less-than-truckload shipments by 1.2% in July, but tonnage per workday increased by 0.9% during the same period. The company’s average weight per shipment rose to 1,359 pounds from 1,331 pounds in July 2024. Benchmark has maintained its Buy rating on Saia, citing better-than-expected third-quarter operating data, with a tonnage decline of 0.7% outperforming its estimate and competitors. BMO Capital raised its price target for Saia to $340, maintaining a Market Perform rating, based on expectations for improved operating ratio performance. Stephens also increased its price target to $300, following second-quarter results that exceeded expectations, with adjusted earnings per share of $2.67 surpassing both their estimate and the consensus. Additionally, Secretary of State Marco Rubio announced a halt to the issuance of worker visas for commercial truck drivers, potentially impacting the trucking industry. These developments highlight Saia’s recent performance and the broader industry context.
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