Latest news with #Hoexter
Business Insider
3 days ago
- Business
- Business Insider
Bank of America Securities Reaffirms Their Sell Rating on Werner Enterprises (WERN)
In a report released today, Ken Hoexter from Bank of America Securities maintained a Sell rating on Werner Enterprises (WERN – Research Report), with a price target of $27.00. The company's shares closed today at $27.79. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, Hoexter is a 3-star analyst with an average return of 1.4% and a 48.39% success rate. Hoexter covers the Industrials sector, focusing on stocks such as CSX, XPO, and ArcBest. The word on The Street in general, suggests a Hold analyst consensus rating for Werner Enterprises with a $28.83 average price target.
Yahoo
07-06-2025
- Business
- Yahoo
BofA Lowers PT for Old Dominion (ODFL), Maintains Neutral Rating
On June 4, BofA Securities lowered its price target for Old Dominion Freight Line, Inc. (NASDAQ:ODFL) from $183 to $172 and kept a Neutral rating on the stock. Ken Hoexter from BofA made the update following Old Dominion's mid-second quarter 2025 result. The American transport and logistics company reported a 5.8% decline year-over-year in revenue per day for May 2025, missing BofA's estimate of a 3.9% decline. Despite such, the company maintains a healthy gross profit margin of 39.75% and a trailing 12-month revenue of $5.73 billion. A large cargo ship navigating a busy port, its scale highlighting the company's marine transportation services. Hoexter also added that the company saw a 6.8% decline in shipments per day, missing the BofA's target of a 6.5% decline. The analyst also pointed out that the economic impact of the China tariffs has contributed to the weak results. Old Dominion's CEO, on the other hand, states that the company is maintaining its market share and profitability. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is a freight transportation and logistics services company that primarily offers services in the United States, Canada, and Mexico . The company also offers household moving services and expedited logistics. While we acknowledge the potential of ODFL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. Read Next: and . Disclosure. None.
Yahoo
24-04-2025
- Business
- Yahoo
TFI's Bedard upbeat on revamped US LTL operations even as numbers sink
(For a recap of TFI International's core financial reporting from Wednesday, see this First look article.) It may come as a surprise that TFI International CEO Alain Bedard was reasonably cheerful Thursday about 2025's first quarter. TFI had posted weak quarterly earnings a day earlier, there was a slide in the company's stock price – about 40% in a year and just a little less than that over the past three months – and previous quarterly earnings calls have been laments about performance. But Bedard noted there have been several changes in management in the U.S. LTL group and said, 'I feel pretty good about where we're going.' Although truckload operations at Quebec-based TFI (NYSE: TFII) have been growing as a percentage of total revenue, primarily because of last year's acquisition of flatbed operator Daseke, the focus on the earnings call Thursday and in recent quarters remains on its LTL operations. Specifically, the primary point of discussion is the U.S. operations that are primarily the legacy business of UPS Freight, which TFI bought in 2021. The U.S. LTL group in the first quarter posted an operating ratio of 98.9%, deteriorating from 92.6% in the corresponding quarter a year earlier. It was 97.3% in the fourth quarter. Bedard in earlier calls has said things such as 'We're too fat' or described some practices in the U.S. LTL group as 'stupid.' But he was decidedly more positive Thursday, despite the weak performance of the group and the company's decline in profitability that has stretched out over several quarters. 'The morale in the group has never been so good,' Bedard said. 'The guys are working hard.' Ken Hoexter at Bank of America Merrill Lynch took a different perspective, calling the U.S. results a 'meltdown.' He noted in a report released prior to the call that tons per day in U.S. LTL were down 4% year on year – he had expected a 2.5% decline – and that they were down sequentially from negative 3% in the fourth quarter of 2024. Bedard conceded on the call that the claims rate of 0.9% was 'terrible.' Hoexter agreed, pointing out that the rate was 0.7% a year ago. The truckload operating ratio (OR) of 93.7% was 150 basis points worse than where Hoexter said Merrill Lynch forecast it would come in. The OR for U.S. LTL was 98.9%. Merrill Lynch has an underperform rating on the stock and has had that opinion since February. Hoexter reiterated it in his report. But he lowered the price objective to $72 from $78. Jason Seidl of TD Cowen said the OR at the U.S. LTL operations had met Cowen's forecast, but also said that projection had been reduced 'given the continued challenges in the U.S. LTL market.' TFI's stock is down about 40% in the past year and 38% in the past three months. Although TFI's earnings did not react significantly at first to the company's earnings, it climbed significantly later. At about 3:30 p.m., just before the trading day's close, TFI was up to $84, an increase of $5.57 or 7.11%. The S&P 500 was up slightly less than 2% at that point. In discussing other reasons for his optimism, Bedard returned to a theme that has been a core message in earlier calls: the need for U.S. LTL operations to increase market share with small to medium customers and reduce reliance on larger companies. 'We lost so many of the small and medium-sized accounts, and we replaced them with corporate accounts with sometimes negative margins,' Bedard said. 'That trend is reversed right now. We're starting to see growth on the small and medium-sized accounts.' He declared: 'I feel really good. The guys are very focused, and that's what we're seeing so far.' Bedard said U.S. LTL, which operates as TForce, has implemented better planning to optimize linehaul efficiency, and is doing the same for its package and delivery operations. He also cited improved software for pricing and file management, a problem he said has been 'a rock in our shoe for so long.' That better pricing technology allows the sales staff to work better in the push to add small to medium-size accounts, Bedard added. He also said there is better information on the unit's productivity on a terminal-by-terminal basis. One benchmark cited by Bedard for his more positive outlook for the LTL segment: missed pickups. A year ago it was about 4%, he said. It's now down to about 1.7%. 'We are improving in real terms, not just in fantasy land,' Bedard said. 'We are improving the reality of our service for the next day and for multiple days. We aren't where we should be, but we are improving.' Bedard touted on the call – as he did in the prepared earnings statement released Wednesday – the company's first-quarter net cash from operating activities of $193.6 million, compared to $200.7 million in the first quarter of 2024. Free cash flow improved significantly, up to $191.7 million from $137.2 million in Q1 2024. He said a combination of share purchases plus TfI's dividend payment resulted in about $94 million of 'excess cash returned to our shareholders during the quarter, which has always been an important objective of ours.' (With the recent decline in TFI's stock price, its forward dividend yield, assuming an annual payout of $1.80, is about 2.3%). Tariffs and the state of the economy were the first subjects broached by analysts. Bedard said, 'We've been really affected because our end customers are sitting on the fence. We will be seeing where this is going to all go, and this is why it's very difficult for us to predict.' Business heading south of Canada into the U.S. has held steady, Bedard said, but the backhaul to Canada is finding many trucks with lots of empty space. The uncertainty has particularly hit what TFI refers to as its specialty truckload operations, which includes the legacy Daseke business. 'The reason it is slow is because nobody knows if you're a farmer today who is going to buy your crop, because the Chinese are saying, 'We're going to buy from Brazil, we're not buying from the U.S. anymore,'' Bedard said. 'Then you're not going to buy a tractor, you're not going to do anything until you get better visibility.' The normally acquisitive TFI, which this year has made two small acquisitions, is not likely to make any major steps this year, Bedard said. Any spinoff of a unit as a stand-alone, like the U.S. LTL operations, would also need to wait for an improvement in the company's market capitalization, he said. Current capitalization is about $5.9 billion. 'In order to be ready when the right time comes, M&A of a sizable deal is going to have to wait until 2026,' he said. More articles by John Kingston A market on the precipice: 5 takeaways from the April State of Freight Wall Street embraces Ryder's mildly positive earnings report then pulls back OOIDA makes now-solo case in court that California's AB5 should exempt trucking The post TFI's Bedard upbeat on revamped US LTL operations even as numbers sink appeared first on FreightWaves.
Yahoo
29-03-2025
- Business
- Yahoo
FedEx Stock's Sell-Off Drags Down UPS. Is the High-Yield Dividend Stock a Buy Now?
Shares of FedEx (NYSE: FDX) hit a new 52-week low on March 21 after the company reported fiscal third-quarter earnings and trimmed its full-year guidance again. Shares of rival package delivery company United Parcel Service (NYSE: UPS) also fell on the news, and then sold off by another 5.1% on March 25 in apparent response to Bank of America analyst Ken Hoexter's downward revision of his forecast for the logistics giant. Hoexter now expects UPS' earnings for the current quarter to be 15% below his prior estimate. With the stock at its lowest level since July 2020, is UPS a buy, or is the dividend stock falling for valid reasons? UPS' sales and operating margins have been falling as the transportation sector has been hit hard by pullbacks in consumer spending and high interest rates. Management is guiding for 2025 revenue to decline by 2.3%, but expects its operating margin to rise by 130 basis points to 8.8% -- an increase compared to 2024, but still below pre-pandemic levels. That guidance is fairly weak, but what was even more concerning was this comment from CFO Brian Dykes on the Q4 earnings call: "Our guidance for 2025 does not reflect any significant potential global trade implications due to changes in tariffs." On the earnings call, UPS noted that S&P Global forecasts 2.5% GDP growth in 2025, and a 2% increase in real exports and global industrial production. However, if tariffs and trade wars hinder economic growth, these estimates could prove too optimistic, and UPS' results could be noticeably worse than its already uninspiring projections. FedEx just cut its fiscal-year adjusted earnings per share (EPS) guidance to a range of $18.00 to $18.60 per share. At the midpoint, that's down by more than 6% from the guidance it gave just a quarter ago, and down 12.9% from its initial forecast for the year from June. Given the analyst cut that sent UPS stock falling last Tuesday, there appear to be reasons to be concerned that UPS' results could be even lower than projected. A slowdown in 2025 could put the company's medium-term goals in jeopardy. On the latest earnings call, UPS said it expects to return to margin growth in 2026 -- forecasting a domestic operating margin of 12% by the fourth quarter of 2026. But if there's a period of prolonged economic weakness, it may not be able to hit that goal on schedule. Since it began distributing regularly scheduled quarterly payouts in 2000, UPS has never cut its dividend. However, there have been years when the company did not raise it. But in 2022, UPS boosted its quarterly dividend from $1.02 per share to $1.52 per share -- a massive increase that may have been a mistake in hindsight. At the time, UPS was firing on all cylinders -- growing its revenue, expanding its operating margin, and generating tons of free cash flow (FCF). If UPS had built on that momentum, that 49% higher dividend would have been reasonable. Instead, EPS and FCF fell while UPS continued to make modest annual increases to its payout. Now, UPS' dividend payments are absorbing the bulk of its FCF and earnings. When UPS decided on that large dividend raise in 2022, it had a much more manageable payout ratio. On UPS' fourth-quarter 2024 earnings call on Jan. 30, management said it expects $5.7 billion in 2025 FCF, which includes its annual pension of $1.4 billion, $3.5 billion in capital expenditures as it invests in improving its network, $1 billion in stock buybacks, and $5.5 billion in dividends. In short, UPS doesn't think it will generate enough FCF to cover its capital allocation targets, which will put pressure on its balance sheet. Fortunately, UPS could take on debt, and even if it did, its balance sheet would still be in great shape. UPS paid down debt during the pandemic years when it was booking unusually strong earnings. Its net total long-term debt position is just $15 billion -- which is healthy for a company of its size -- as evidenced by its strong leverage ratio. UPS can cover a bit of its capital return program by taking on debt in the near term. However, that's not a sustainable strategy, and it will need to improve its earnings and FCF significantly to reach its target payout ratio of 50%. President Donald Trump's tariffs are coming at a terrible time for UPS, as the company was already in recovery mode. A U.S. economic slowdown could delay the company's turnaround and put further pressure on its balance sheet. If its FCF continues to decline, it could cut its stock buyback program. And if macroeconomic conditions get really bad and stay bad for a while, UPS could have little choice but to consider a dividend cut. While no investor welcomes a dividend cut, UPS' yield is high enough that it could trim the payout and still be an excellent source of passive income. For example, if UPS reduced its dividend to $1 per share per quarter -- about the same payout it was distributing at the end of 2021 before its massive raise, the stock would still yield 3.6% based on its share price of around $110 at the time of this writing. That's still a far higher yield than the market average, and higher than many quality dividend stocks. UPS' near-term prospects look bleak, but its balance sheet is strong, it remains an industry leader, and its dividend could take a cut and still be attractive. UPS is also trading at a dirt-cheap valuation of just 16.3 times earnings. If its earnings fall by, say, 20% in 2025, UPS would still have a P/E of around 20 at the current share price, making it a bargain even assuming an especially negative scenario. Add it all up, and UPS could be a great buy for patient investors willing to look past the next few years. Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $682,965!* Now, it's worth noting Stock Advisor's total average return is 842% — a market-crushing outperformance compared to 165% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 24, 2025 Bank of America is an advertising partner of Motley Fool Money. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, FedEx, and S&P Global. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy. FedEx Stock's Sell-Off Drags Down UPS. Is the High-Yield Dividend Stock a Buy Now? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
27-03-2025
- Business
- Yahoo
Why United Parcel Service Stock Slumped by 5% on Tuesday
The logistics sector is not currently in favor with investors, to put it mildly, and United Parcel Service (NYSE: UPS) stock was bearing the brunt of this on Tuesday. The lingering disappointment of a peer's quarterly earnings report, fears about the damaging effects of aggressive tariffs, and a pundit's price target cut sent UPS's shares down on the second trading day of the week; they closed the session more than 5% lower in price. The S&P 500 index fared better, relatively speaking, by essentially flatlining across the day. The immediate catalyst was that price target reduction. This was made by analyst Ken Hoexter from influential lender Bank of America's Securities unit. Hoexter's cut was more like a modest trim, as his UPS price target was lowered only to $129 per share from the preceding $133. Despite the gloom blanketing the logistics sector generally, the analyst maintained his buy recommendation. It wasn't immediately apparent why he made this move, but it came at a dicey time for UPS' industry. As it and fellow parcel hauler FedEx are considered cyclical businesses due to their servicing every conceivable part of our economy, investors are worried that the looming tariffs promised by the Trump administration will negatively affect their volumes. Compounding that, FedEx isn't exactly turning out to be the stock of the month. On Thursday, it published its fiscal third quarter of 2025 figures. While the company notched a beat on the consensus analyst estimate for revenue, it whiffed on earnings. Worse, it cut both its top and bottom-line guidance for the entirety of the year. If FedEx is struggling, it's entirely realistic to imagine UPS wrestling with the same conditions. Investors are right to be wary of logistics sector stocks just now. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $314,847!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $41,848!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $524,186!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 24, 2025 Bank of America is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and FedEx. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy. Why United Parcel Service Stock Slumped by 5% on Tuesday was originally published by The Motley Fool Sign in to access your portfolio
