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On Wednesday, UBS analysts maintained a Buy rating on Schneider National (NYSE: NYSE:SNDR) shares, with a steady $25.00 price target, which aligns with InvestingPro’s analysis suggesting the stock is currently undervalued. Trading at a P/E of 32x with a market cap of $4.1 billion, the company has maintained profitability over the last twelve months. The endorsement follows recent meetings with the company’s top executives, including the CEO and CFO. Schneider National’s management reported a stable demand environment currently, but noted increasing pressures on owner operators and small truckload companies. This stress is evidenced by a doubling in the default rate on tractor leasing, nearing levels seen during the 2008-2009 Great Recession. Despite industry challenges, InvestingPro data shows the company maintains strong financial health with a current ratio of 1.9 and operates with moderate debt levels.
The company has strategically pivoted towards dedicated contract truckload business, yet it retains significant exposure to the truckload (TL) cycle through its intermodal, network TL, and brokerage operations. Analysts at UBS are optimistic about Schneider National’s intermodal volumes, highlighting the company’s robust position to capitalize on growth in the US/Mexico cross-border market. This optimism is bolstered by Schneider’s long-standing experience in this trade lane and the high-quality service provided by CPKC.
Schneider National has also expressed satisfaction with its overall intermodal performance as it navigates the bid season and secures new contract awards, which are anticipated to support volume growth. While the stock has experienced a significant 25% decline over the past six months, the company’s shift in focus and strategic moves appear to align with current market conditions and opportunities, positioning it favorably in the eyes of UBS analysts. This outlook is particularly relevant considering the broader industry challenges faced by smaller operators in the logistics and transportation sector. For deeper insights into Schneider National’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro, which includes additional proprietary metrics and analysis.
In other recent news, Schneider National reported its first-quarter 2025 earnings, with an adjusted earnings per share (EPS) of $0.16, meeting analysts’ expectations. The company’s revenue for the quarter was $1.26 billion, which fell short of the projected $1.42 billion. Despite the revenue miss, Schneider’s strategic initiatives, including a focus on AI and digital technologies, have bolstered investor confidence, resulting in a positive market reaction. The company maintains its full-year 2025 EPS guidance between $0.75 and $1.00, with capital expenditures expected to range between $325 million and $375 million.
Schneider National has also revised its adjusted EPS guidance for 2025 to a range of $0.75 to $1.00, down from the previous forecast of $0.90 to $1.20. Citi analyst Ariel Rosa adjusted the price target for Schneider to $24.00, up from $23.00, while maintaining a Neutral rating on the company’s shares. The transportation company is strategically securing new business while withdrawing from contracts that do not meet its pricing criteria. Schneider plans to reallocate trucks between its Dedicated and Network segments in response to client transitions and competitive market conditions.
Furthermore, Schneider’s first-quarter earnings call highlighted a robust performance, with enterprise revenues increasing by 8% year-over-year and adjusted income from operations rising by 47%. The company’s strategic focus includes enhancing operational efficiency and managing cost reductions while investing in growth initiatives. Schneider’s acquisition of Cowen Systems has been immediately accretive, contributing to a 27% increase in the number of trucks in service. The company continues to monitor potential risks, including tariff impacts and trade policy volatility, which could affect freight demand and pricing.
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