As previously reported, Stephens analyst Brad Delco downgraded Knight Transportation to Equal Weight from Overweight on valuation. While the analyst is encouraged by the improvement in Truckload fundamentals, a challenged pricing environment from last year's bid season, combined with a weak used truck market and higher fuel costs should serve as earnings overhangs for the group this quarter.

Barclays lowered the firm's price target on Knight-Swift to $57 from $62 and keeps an Overweight rating on the shares. While soft Q1 results were expected, the company's updated guidance sheds light on the magnitude of the supply challenges facing the truckload sector, the analyst tells investors in a research note. However, the firm says the market appears more focused on less-than-truckload, with flat Q2 margin guidance perhaps calling into question expectations for operating ratio improvement at larger competitors.

Loop Capital last night downgraded Knight-Swift (KNX) to Hold from Buy with a price target of $53, down from $63. While CSX's (CSX) results held up reasonably well in an economy "pretty devoid of freight demand," Knight-Swift "is in a very different place, with a profit warning on Wednesday," the analyst tells investors in a research note. The firm says the demand picture "suggests the bottom might still be ahead of us." In addition, Knight-Swift recent missteps "have taken the shine off their best-in-class reputation," contends Loop. The firm is moving to the sidelines until the U.S. freight economy "begins to organize itself in a more constructive manner."

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Consensus 48c. The company said, "The Company also expects that Adjusted EPS for the second quarter of 2024 will range from $0.26 to $0.30 (which is an update from the previously-announced expectation of $0.53 to $0.57). This updated range assumes the more challenging market conditions noted above continue, such as the bid season trends and less pronounced seasonality in the truckload market than originally projected and reflects: Truckload segment operating ratios in the mid-90's for our existing businesses and continued roughly break-even operating results for U.S. Xpress with overall revenues stabilizing at declines of roughly 5% from the fourth quarter level due to headwinds on revenue per mile and on dedicated services; LTL segment operating ratio performing at similar levels as the second quarter of 2023 with year-over-year revenue growth of 10-15%; Logistics segment operating ratio in the mid-90's with year-over-year revenue growth of 10 to 15%, as a result of the U.S. Xpress acquisition; Intermodal segment operating ratio approaching breakeven during the quarter with revenues down slightly year-over-year; and All Other segments operating income of approximately $10-15 million for the quarter before including the $11.7 million intangibles asset amortization. We plan to provide third quarter 2024 guidance in conjunction with the first quarter 2024 earnings release on April 24, 2024. Our Adjusted EPS ranges are based on the current freight market, recent trends, and the current beliefs, assumptions, and expectations of management."