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Thursday
Benchmark analysts maintained a Hold rating on Landstar System (NASDAQ:LSTR) stock, acknowledging the transportation company’s resilience amid economic and industry challenges. The company, currently trading at $143.04 with a market cap of approximately $5 billion, appears overvalued according to InvestingPro analysis. Landstar reported a first-quarter 2025 earnings per share (EPS) of $0.85, which included a $0.10 charge related to a previously announced supply chain fraud. This charge was significantly lower than the initial estimates of $0.35 to $0.50. InvestingPro data shows the company maintains strong financial health with a current ratio of 2.03, indicating robust liquidity to meet short-term obligations.
On Thursday, the company revealed that the number of loads hauled via truck in the first quarter surpassed the high end of its guidance from the fourth quarter earnings release. This marked the first time in over 15 years that the first-quarter load count exceeded that of the fourth quarter. However, the company noted the difficulty in assessing the extent to which this increase was due to a pull forward in response to tariff uncertainties.
Landstar’s first-quarter performance, excluding the fraud charge, was preannounced on April 25th with an EPS of $0.95 and revenue of $1.153 billion, a slight decrease of 1.6% year-over-year but still above the expected range. Despite higher revenues, increased costs partially offset these gains.
The company is experiencing a downward trend in its Business Capacity Owner (BCO) truck count due to the low truckload rate environment. Nevertheless, the retention rate is improving, and the quarter-to-date truck count for the second quarter, while still declining, could potentially reflect the best quarter-over-quarter net truck performance in three years.
In light of these circumstances, Benchmark analysts have adjusted their estimates to account for lower seasonal volume growth and rising costs. They have reiterated their Hold rating on Landstar stock, citing that the current valuation reflects the company’s high-quality business and strong balance sheet in a challenging freight demand environment with excessive capacity. InvestingPro reveals additional insights about Landstar’s financial strength, including its 21-year streak of consistent dividend payments and a current dividend yield of 2.41%. Subscribers can access over 30 additional financial metrics and insights in the comprehensive Pro Research Report.
In other recent news, Landstar System reported its first-quarter 2025 financial results, revealing a mixed performance with earnings per share (EPS) falling short of expectations at $0.85, compared to the projected $0.94. However, the company exceeded revenue forecasts, achieving $1.15 billion against the expected $1.13 billion. This performance was affected by a $4.8 million charge related to a supply chain fraud incident, which impacted earnings by approximately $0.10 per share. Despite these challenges, Landstar’s heavy haul services saw a 6% increase in revenue, indicating a strong segment performance.
Analysts at Stifel and Evercore ISI have adjusted their outlook on Landstar, with Stifel reducing the price target from $147 to $140 while maintaining a Hold rating, and Evercore ISI lowering the price target slightly from $137 to $136, maintaining an In Line rating. Both firms acknowledge the impact of the fraud incident but consider it a non-recurring issue. Evercore ISI also adjusted its EPS estimates for the second quarter and full years 2025 and 2026, reflecting a cautious stance due to the current freight market conditions.
The company has faced increased insurance claims due to imposter scams and cargo theft, leading to a higher claims ratio. Landstar’s leadership highlighted ongoing investments in technology and strategic growth initiatives to navigate the challenging freight environment. Despite the operational hurdles, the company remains focused on leveraging its strengths in specialized services and cross-border operations to drive future growth.
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