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Investing.com - Stifel raised its price target on Forward Air (NASDAQ:FWRD) to $32.00 from $30.00 on Friday, while maintaining a Buy rating on the transportation and logistics company’s shares. The $641 million market cap company has seen its stock decline nearly 48% over the past year, with a particularly sharp 35% drop year-to-date.
The research firm attributed recent weakness in Forward Air’s stock to "waning confidence in a protracted sale process" and macroeconomic pressures, specifically renewed trade tensions between the United States and China. According to InvestingPro data, the company’s high debt-to-equity ratio of 14.25x adds to these concerns, though strong revenue growth of 35% in the last twelve months suggests operational resilience.
Despite these concerns, Stifel expressed a constructive view on the company, stating that "an imminent take-private or sale event is likely" and that the "heavy lifting is done with regard to operational merger integration."
The firm highlighted Forward Air’s ability to generate "a high degree of relative free cash flow in a mid-cycle environment," which helps mitigate risks associated with its debt levels and supports a longer-term organic valuation of $30 or higher.
Stifel acknowledged that Forward Air faces "elevated risk versus peers" due to its "outsized exposure to trade tensions" and noted that integration work remains to be completed.
In other recent news, Forward Air Corporation reported its second-quarter results, showing a slight EBITDA beat compared to consensus estimates. The company achieved this despite facing challenging freight market conditions, with improvements in EBITDA margins attributed to pricing optimization and discretionary expense management. Meanwhile, Stifel raised its price target for Forward Air to $32, maintaining a Buy rating, amid discussions of a potential sale and macroeconomic pressures such as U.S.-China trade tensions. Leadership changes were also announced, with Jason Ringgenberg stepping in as interim Chief Information Officer following the resignation of Joseph M. Tomasello. Additionally, the company saw a change in its board of directors as Michael B. Hodge resigned for personal and professional reasons. Forward Air is also actively engaged in a nationwide automotive replenishment project through its Omni Logistics division, partnering with a global automaker to manage logistics from manufacturing to dealerships across North America. Benchmark reiterated its Hold rating on Forward Air, noting the company’s ongoing integration with Omni and its focus on streamlining operations.
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