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Investing.com - DA Davidson has reiterated its Neutral rating and $9.50 price target on Wabash National (NYSE:WNC), currently trading at $9.84, following the release of June US trailer-industry data. According to InvestingPro data, the stock has declined over 42% year-to-date, though analysis suggests slight undervaluation at current levels.
The research firm noted that trailer orders increased 144% year-over-year in June, though it emphasized that June is typically an off-peak month for the industry.
Shipments declined 23% year-over-year, with second-quarter shipments down 26% compared to the same period last year, while backlogs decreased 16% year-over-year.
Industry trailer forecasts continue to be reduced amid tax and regulatory uncertainties, coupled with challenging freight fundamentals that have shown significant persistence.
While these forecasts suggest an uptick next year, DA Davidson remains cautious on Wabash National as there appear to be few tangible signs that an improvement is imminent.
In other recent news, Wabash National Corporation has announced a quarterly dividend of $0.08 per share, payable on July 24 to shareholders of record as of July 3. In another development, S&P Global Ratings downgraded Wabash National’s credit rating to ’B+’ from ’BB-’ due to weaker cash flows and increased leverage resulting from declining trailer deliveries. This downgrade reflects a challenging environment as freight carriers delay capital expenditures, affecting the company’s credit measures. Analysts at DA Davidson have raised their price target for Wabash National to $9.50 from $7.50, maintaining a Neutral rating. This adjustment is based on a slightly higher market multiple, although the firm remains cautious due to ongoing challenges in the trailer industry. ACT Research data indicates a 12% year-over-year increase in trailer orders, yet backlogs and shipments are down significantly, highlighting persistent difficulties in the market. Despite these challenges, Wabash National is making strategic moves, including growth in Parts & Service and Trailer-as-a-Service, to navigate the uncertain economic landscape.
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