| Over a week ago | ||||
Old Dominion reported… Old Dominion reported certain less-than-truckload, or LTL, operating metrics for May . Revenue per day increased 26% as compared to May 2021 due to a 2.3% increase in LTL tons per day and an increase in LTL revenue per hundredweight. The change in LTL tons per day was attributable to a 2.8% increase in LTL shipments per day that was partially offset by a 0.6% decrease in LTL weight per shipment. For the quarter-to-date period, LTL revenue per hundredweight and LTL revenue per hundredweight, excluding fuel surcharges, increased 22.4% and 9.6%, respectively, as compared to the same period last year. | ||||
| Over a month ago | ||||
Citi analyst Christian… Citi analyst Christian Wetherbee lowered the firm's price target on Old Dominion to $265 from $295 and keeps a Neutral rating on the shares. The analyst downgraded three stocks in U.S. rails and lowered estimates across the board for the group. He sees near-term risk in a decelerating freight and economic environment and notes that rail valuations have actually improved relative to the market while earnings growth expectations are at their highest. A more cautious approach is warranted given "freight warning signs" and "persistent" service issues, Wetherbee tells investors in a research note. He believes these can result in a "delayed operational reaction to a true downturn." | ||||
Cowen analyst Jason Seidl… Cowen analyst Jason Seidl raised the firm's price target on Old Dominion to $232 from $213 and keeps a Market Perform rating on the shares. The analyst said they reported a 1Q above his forecast and consensus expectations as both pricing and volume held up in the quarter while April data suggests revenue growth of 28% driven by continued strength in consumer and industrial shipments. | ||||
Wells Fargo analyst… Wells Fargo analyst Allison Poliniak-Cusic raised the firm's price target on Old Dominion to $280 from $255 and keeps an Equal Weight rating on the shares. Old Dominion appears on track for another year 200+ bps of OR improvement with a sub-70% possible in Q2, the analyst contends. | ||||
Susquehanna analyst… Susquehanna analyst Bascome Majors raised the firm's price target on Old Dominion to $285 from $275 and keeps a Neutral rating on the shares. The analyst noted they reported an operating beat led by better than seasonal margin and said he believes earnings still have room to grow into a late-cycle multiple, with ODFL the only truck-related transport still trading above its long-term average P/E. | ||||
Comments taken from Q1… Comments taken from Q1 earnings conference call. | |
Reports Q1 revenue $1.5B,… Reports Q1 revenue $1.5B, consensus $1.45B. Greg Gantt, president and CEO of Old Dominion, commented, "Old Dominion is off to a successful start in 2022 with first quarter financial results that include new Company records for revenue and earnings per diluted share. The increase in revenue for the quarter reflects the consistent strength in demand for our superior service that was supported by a favorable domestic economy. We continue to provide best-in-class service at a fair price while also offering available network capacity, both of which differentiate Old Dominion in the marketplace and support our ongoing ability to win market share." | |
Raymond James analyst… Raymond James analyst Patrick Tyler Brown lowered the firm's price target on Old Dominion to $305 from $365 and keeps an Outperform rating on the shares. Brown continues to see durability in the firm's secular LTL pricing thesis and believes that Old Dominion's high-quality network and industry-leading door ownership position carries more value and competitive advantages than the market appreciates, the analyst tells investors in a research note. | |
The recent sharp sell-off… The recent sharp sell-off in transportation equities "is likely to soon become a rare and compelling buying opportunity," Deutsche Bank analyst Amit Mehrotra tells investors in a research note. Equity markets "almost always overshoot during periods of macro transition," and the transition poses the greatest risk to cyclicals as "fear" takes hold, says the analyst. He believes that over time, the "rules of cyclical investing emerge, which allow valuation to re-rate higher as greater clarity is reached on peak-to-trough declines." Mehrotra thinks the current "air pocket" in consumer freight flows reflects China's COVID-19-related lockdowns, with volume likely to come back strongly as restrictions ease. He cautions, though, that there is potential for 40% further downside in transportation equities under a "fear" scenario, which is not his base case. | |
Deutsche Bank analyst… Deutsche Bank analyst Amit Mehrotra placed a "Catalyst Call Buy" on Hold-rated Old Dominion ahead of the company's Q1 results. He believes the spike in fuel prices in early March has the potential to boost less-than-truckload company margins in Q1, which reflects the unique mechanism of fuel surcharges equating to a percent of base rates. Given base rates have increased significantly over the last several years, Mehrotra sees higher fuel surcharge revenue being margin accretive. The analyst also sees this benefit spilling over to Q2 as fuel prices stay elevated, and more fuel surcharge revenue is realized. |
