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On Friday, TD Cowen maintained a Buy rating on TFI International (NYSE:TFII) but reduced the price target to $128 from $135, as the stock has fallen over 40% in the past six months. According to InvestingPro data, 10 analysts have recently revised their earnings estimates downward, supporting TD Cowen’s cautious stance. The firm’s analysts cited near-term risks and lowered first-quarter expectations as the reasoning behind the adjustment, though InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels. According to TD Cowen, TFI International is facing margin pressures at TForce and specialized truckload (TL) challenges as Daseke (NASDAQ:DSKE) adapts to a weaker market.
The analysts pointed to several strategic changes implemented by TFI International since its fourth-quarter earnings call to address issues at TForce, which they believe are positive for the medium term. However, the first quarter is expected to experience more pressure than previously anticipated. TFI International’s significant industrial exposure, around 80%, means that the current tariff and macroeconomic paralysis has had a notable impact on freight demand.
March has shown weaker seasonality than usual, aligning with reports from channel checks. The analysts expect that TForce and Specialized TL, which includes flatbed and auto volumes, will be most impacted. Conversely, segments exposed to retail, such as Canadian less-than-truckload (LTL), Logistics, and Package and Courier (P&C), should perform relatively better despite the overall soft demand environment.
The revised price target of $128 reflects the analysts’ response to the anticipated risk to first-quarter consensus estimates and the adjustments made to their own projections. With analysts’ targets ranging from $105 to $180 and EPS forecast of $5.92 for the upcoming fiscal year, TD Cowen remains positive on TFI International’s stock over the medium term, despite the near-term headwinds. For deeper insights into TFI International’s valuation and growth prospects, including 8 additional ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, TFI International has experienced several notable developments. The company reported a 30% year-over-year decrease in earnings per share (EPS) for the fourth quarter of 2024, with a disappointing $1.19 EPS that fell short of analyst estimates. This shortfall is largely attributed to challenges within the U.S. Less-Than-Truckload (LTL) segment, which saw its adjusted operating ratio worsen significantly. Citi analysts responded by lowering TFI International’s stock target from $162 to $130, maintaining a Buy rating, while TD Cowen also cut their target to $135 and kept a Buy rating. UBS took a more cautious approach, downgrading the stock to Neutral and reducing the price target to $107 due to concerns over the LTL margin improvements. BofA Securities downgraded TFI International to Underperform, setting a new price target at $109, citing rising costs and stagnant earnings projections for 2025. Additionally, BofA Securities highlighted a 58% decrease in Ground Freight Pricing revenue, related to the TForce Freight division, as a significant concern. These developments paint a challenging picture for TFI International as it navigates operational hurdles and market pressures.
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