U.S. stock futures slip lower; Cook’s firing increases Fed independence worries
On Thursday, Benchmark maintained its Hold rating on Landstar System (NASDAQ:LSTR), a $5.2 billion market cap transportation company, following its recent update on first quarter guidance. According to InvestingPro data, the company has demonstrated consistent profitability with a healthy 20.2% gross profit margin over the last twelve months. Analysts at Benchmark attended a meeting with Landstar’s management team, where the company disclosed an update to its financial expectations through an 8K filing. Although Landstar’s Truckload volume and revenue per load are projected to meet the midpoint of the previously stated $1.075-$1.175 billion revenue guidance, the updated earnings per share (EPS) guidance of $0.90-$0.95 falls short of the earlier $1.05-$1.25 range.
The company’s insurance and claims costs are anticipated to be significantly higher in the first quarter of 2025, driven by an increase in cargo theft and truck accident claims, a challenge affecting other truckload (TL) transportation companies as well. Despite these challenges, InvestingPro analysis shows Landstar maintains strong financial health with a current ratio of 1.96, indicating sufficient liquid assets to meet short-term obligations. Additionally, Landstar reported a substantial supply chain fraud in the last fiscal week of the first quarter, which is currently under investigation. The fraud does not involve the company’s core North American truckload business but is expected to negatively impact EPS by $0.35 to $0.50. This estimate does not account for any potential insurance or other recoveries.
The fraud relates to an impairment of a trade accounts receivable recorded on the balance sheet dated December 28, 2024. Benchmark has stated that their estimates for Landstar are under review in light of the recent developments. The company’s situation reflects broader industry challenges with cargo theft and accidents, as well as unique issues with supply chain fraud.
Landstar’s situation is being closely monitored by analysts, and the company’s stock rating remains unchanged at Hold for the time being. The stock is currently trading near its 52-week low of $144.13, though the company maintains strong fundamentals, including a 21-year streak of consistent dividend payments. For deeper insights into Landstar’s financial health and detailed analysis, investors can access comprehensive research reports available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Landstar System reported its fourth-quarter 2024 earnings, which showed a slight miss on earnings per share (EPS) forecasts. The company’s EPS was $1.31, falling short of the anticipated $1.36, while revenue slightly exceeded expectations at $1.21 billion against a forecast of $1.2 billion. Analysts from Goldman Sachs maintained a Sell rating on Landstar with a steady price target of $150, noting that higher-than-expected insurance costs have impacted the company’s earnings guidance for the first quarter of 2025. Truist Securities also adjusted its price target for Landstar to $150 from $160 while maintaining a Hold rating, citing increased insurance costs and risks associated with cross-border tariffs. Landstar’s management indicated that revenue for the first quarter of 2025 is expected to be between $1.075 billion and $1.175 billion, with EPS projected to range from $0.90 to $0.95. The company repurchased approximately 386,000 shares at a cost of $60 million in the first quarter of 2025, demonstrating its commitment to shareholder returns. Despite challenges in the truckload sector, Landstar anticipates slow, steady rate improvement throughout 2025, amid a competitive market environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.