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On Tuesday, Stifel analysts revised their outlook on Universal Logistics (NASDAQ:ULH), reducing the price target from $37.00 to $29.00 while retaining a Hold rating on the stock. The stock has faced significant pressure, with a year-to-date decline of 50% according to InvestingPro data. This adjustment follows Universal Logistics’ first-quarter earnings report, which fell short of expectations. The company reported earnings per share (EPS) of $0.23, which was significantly lower than Stifel’s projection of $0.48. The logistics firm’s revenues also came in below estimates at $382 million, missing both Stifel’s forecast of $401 million and the company’s own guidance range of $390-410 million.
The shortfall in revenue was primarily attributed to underperformance in the Trucking segment and a persistent downturn in freight, compounded by challenges in auto production. Despite generating $1.74 billion in revenue over the last twelve months, these factors collectively led to reduced profitability for Universal Logistics. The reported EBIT margin of 4.1% not only missed Stifel’s estimate of 7.2% but also fell short of the company’s anticipated range of 6.5-7.5%. The earnings miss was apparent across all operating divisions, with Contract Logistics experiencing notable underperformance. InvestingPro analysis reveals the company is currently trading at an attractive P/E ratio of 8.45, suggesting potential value despite operational challenges.
The analysis by Stifel reflects concerns over the current state of the automotive industry, including the pressure on original equipment manufacturers (OEMs), decreasing class 8 orders, and expectations of decelerated new contract activity. Given these market conditions, Stifel suggests that the opportunities for Universal Logistics might be diminishing. While the company maintains a healthy current ratio of 1.64, its debt-to-equity ratio of 1.14 indicates a significant leverage position. The firm also points to the higher risk associated with investing in Universal Logistics, which they believe warrants a greater risk premium. The Hold rating indicates that Stifel’s analysts do not currently see Universal Logistics as a compelling buy or sell option. For a deeper understanding of ULH’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Universal Logistics Holdings reported a challenging first quarter for 2025, with earnings per share (EPS) of $0.23, significantly missing the analyst forecast of $1.04. Revenue for the quarter was reported at $382.4 million, falling short of the anticipated $454.1 million. This underperformance was reflected in a year-over-year net income decline from $52.5 million to $6 million. The company’s acquisition of Parsec contributed $56.4 million in revenue, highlighting strategic efforts to counterbalance the downturn. Despite the setbacks, Universal Logistics anticipates improved performance in the latter half of 2025, projecting second-quarter revenue between $390 million and $410 million. The firm also expects operating margins to improve to a range of 5-7%. Analysts from Stifel have noted that Universal’s automotive sector saw a rebound in production volumes as the quarter progressed, providing some optimism for future quarters.
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