DA Davidson lifts Wabash stock rating to Buy, sets $14 target

On Monday, DA Davidson analysts revised their rating for Wabash National (NYSE:WNC) stock, upgrading it from Neutral to Buy with a new price target of $14.00. The adjustment follows the release of February US trailer-industry data by ACT Research, which serves as a significant indicator for Wabash National’s business performance. The stock, currently trading at $11.16, has experienced significant volatility, falling nearly 59% over the past year. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.

The data revealed a year-over-year decrease of 13% in orders for the month of February. Additionally, backlogs and shipments both experienced significant declines, dropping 34% and 35% year-over-year, respectively. These figures highlight the challenges faced by the trailer industry, including concerns about the stability of freight fundamentals. The company’s revenue declined 23% in the last twelve months to $1.95 billion, with a gross profit margin of ~14%. InvestingPro subscribers have access to 10+ additional exclusive insights about Wabash National’s financial health and growth prospects.

Despite these concerns, there is a silver lining that may benefit Wabash National. Proposed changes to emissions-reduction policies could discourage a rush to purchase trucks before the implementation of such policies, potentially leaving more capital expenditure budgets available for trailers. This scenario could provide a favorable environment for Wabash National.

In their commentary, DA Davidson analysts expressed a cautious stance on Wabash National’s outlook. They emphasized the need for greater clarity on the impact of US tariff policies and potential regulatory changes before adopting a more confident position on the company’s prospects.

Wabash National’s stock rating upgrade to Buy from Neutral by DA Davidson reflects a nuanced perspective on the company’s potential, balancing industry-wide challenges with specific policy changes that could positively influence the market for trailers. The new price target of $14.00 aligns with broader analyst sentiment, with targets ranging from $14 to $23. Analysts expect the company to return to profitability this year, with forecasted earnings per share of $0.91. For comprehensive analysis and detailed valuation metrics, investors can access the full Pro Research Report available on InvestingPro.

In other recent news, Wabash National Corporation has experienced significant legal and strategic developments. A Circuit Court reduced the punitive damages in a product liability case from $450 million to $108 million, while maintaining compensatory damages at $11.5 million. This legal matter originated from a 2019 accident involving a Wabash trailer. Despite the reduction, Wabash National contends that the punitive damages remain excessively high and is considering further legal action.

In another development, Wabash National announced the acquisition of TrailerHawk.ai, a company specializing in cargo security and smart access technology. This acquisition aims to enhance Wabash’s Trailers as a Service (TaaS) platform, offering improved freight protection and operational insights. Additionally, DA Davidson recently adjusted its financial outlook for Wabash National, lowering the stock’s price target from $18.00 to $14.00, while maintaining a Neutral rating. The adjustment was influenced by recent trailer-industry data and concerns over inconsistent freight industry fundamentals.

These updates reflect Wabash National’s ongoing efforts to navigate legal challenges and expand its service offerings in a rapidly changing market.

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