Landstar System: Hold Rating Amid Challenging Market Conditions and Financial Setbacks
Ravi Shanker has assigned a Hold rating to Landstar System due to challenging market conditions and financial setbacks. Despite a sequential increase in BCO truck count and improvements in some segments, the freight market remains soft, with muted expectations for the peak season. The third-quarter results were impacted by impairment charges, leading to a miss in earnings per share. Ongoing issues with insurance costs and potential volatility from recent accidents contribute to a cautious outlook. Barclays also maintains a Hold rating with a $130.00 price target.
Ravi Shanker has given his Hold rating due to a combination of factors impacting Landstar System’s performance. Despite some positive developments, such as the first sequential increase in BCO truck count since early 2022 and improvements in certain business segments, the overall market conditions remain challenging. The company is facing continued softness in the freight market, with subseasonal trends observed in October and muted expectations for the peak season.
Additionally, the financial results for the third quarter were affected by various impairment charges, which contributed to a miss in earnings per share compared to expectations. While the adjusted earnings before interest and taxes were roughly in line with consensus, the ongoing issues with insurance costs and potential volatility due to recent accidents add to the cautious outlook. These factors combined lead to a Hold rating as the company awaits clearer catalysts for improvement.
In another report released on October 30, Barclays also maintained a Hold rating on the stock with a $130.00 price target.
