On Thursday, Evercore ISI analyst Jon Chappell increased the price target for Knight Transportation (NYSE:KNX), an $8.9 billion transportation company, to $62 from $61, while maintaining an In Line rating. The adjustment follows Knight Transportation’s fourth-quarter earnings, where the company reported an adjusted EPS of $0.36, surpassing both Evercore ISI’s estimate and the average forecast of $0.33. According to InvestingPro data, the stock currently trades at a relatively high earnings multiple, with analyst targets ranging from $48 to $70.
Knight Transportation’s truckload margin significantly outperformed expectations, contributing to an earnings before interest and taxes (EBIT) that was $1 million higher than the Street’s predictions. However, this figure did not meet Evercore ISI’s estimate by $3 million. The earnings surprise was attributed to a lower tax rate. Despite less-than-anticipated less-than-truckload (LTL) margins due to the accelerated integration of newly acquired terminals, the stock indicated a 5.7% increase in early trading. It’s worth noting that Knight Transportation has maintained dividend payments for 21 consecutive years, demonstrating consistent shareholder returns. Discover more insights about KNX’s financial health and growth potential with a InvestingPro subscription, which includes exclusive analysis and detailed metrics.
The company reaffirmed its first-quarter 2025 EPS guidance of $0.29 to $0.33 and provided a second-quarter forecast of $0.46 to $0.50. Evercore ISI’s analysis suggests that the projected sequential improvement in truckload margins and the potential for mid-cycle margins in 2026 to surpass previous expectations have fueled investor optimism. The LTL margin setback is seen as a temporary issue that will pave the way for significant margin growth starting in the second quarter of 2025.
Evercore ISI has revised its 2025 EPS estimate for Knight Transportation to $2.06 from $2.00 and the 2026 forecast to $3.27 from $3.20. Chappell noted that while Knight Transportation has made significant strides in enhancing productivity and margins, with a strong demand tailwind likely to boost EPS growth, the current stock price reflects only a modest upside. The analyst suggested that another seasonal pullback might provide a better opportunity for investors banking on the aggressive expectations for 2026 outcomes.
In other recent news, Knight-Swift Transportation Holdings Inc. posted fourth quarter earnings that surpassed analyst expectations, even though revenue fell slightly short of estimates. The company reported adjusted earnings per share of $0.36, outdoing the analyst consensus of $0.34, while revenue was $1.86 billion, a tad below the anticipated $1.88 billion. Knight-Swift also provided a positive outlook for the first half of 2025.
The company’s truckload segment demonstrated resilience, with its adjusted operating ratio showing improvement, and the less-than-truckload (LTL) division saw a significant increase in revenues, albeit profitability was affected by expansion costs. The firm expects earnings per share between $0.29 and $0.33 for the first quarter and between $0.46 to $0.50 per share for the second quarter, both predictions exceeding analyst projections.
These developments underscore recent trends in Knight-Swift’s operations, as commented by CEO Adam Miller. Miller noted the benefits of the company’s diversified business model, with improvements in the truckload segment offsetting cost pressures from the LTL segment’s expansion. The CEO also expressed optimism about future market conditions, citing encouraging customer sentiment and early bid season activity.
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