Landstar System ( NASDAQ: LSTR ) was upgraded to Buy at Raymond James as the firm’s analysts believe “the transport complex is likely on the verge of more material outperformance” as macro conditions shift.
The analysis assumed that truck spot rates will recover during the year due to capacity reductions. Operating margins are also assumed to miss Landstar’s ( LSTR ) targeted rate by a small margin. Overall, the valuation for the Florida-based transportation company at present makes this scenario promising for upside momentum.
“We see Landstar as uniquely positioned to capitalize on a likely more pronounced capacity exodus into 2H23/1H24 within the truckload market given its role as an early beneficiary of a spot market inflection,” equity analyst Felix Boeschen wrote. “Longer-term, we also believe LSTR stands to benefit from its outsized flatbed exposure (~25% of sales) pursuant to the infrastructure bill, its large trailer pool in wake of rising power-only brokerage competition and its high FCF conversion/dry powder for share buybacks.”
Boeschen assigned a $200 price target to the stock alongside his move from Market Perform to Outperform.
the company’s latest earnings resultFor further details see:
Landstar System upgraded to Buy on anticipated spot rate inflection