What Happened?
Shares of freight carrier Old Dominion (NASDAQ:ODFL) jumped 5.7% in the afternoon session after BMO Capital upgraded the stock's rating to "Outperform" from "Market Perform". The analyst, Fadi Chamoun, pointed to the company's strong market position and its ability to maintain high service levels and pricing power, even during a broader slowdown in the freight industry. Despite the upgrade, the firm slightly lowered its price target to $170 from $172. The positive outlook was also based on the idea that carriers handling smaller shipments often recover first from economic slumps. Old Dominion's exposure to industrial freight was also viewed as a favorable factor for future growth as the economy improves.
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What Is The Market Telling Us
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 8.7% on the news that the company reported second-quarter earnings and revenue that missed Wall Street expectations.
The trucking company posted revenue of $1.41 billion, down 6.1% from the previous year and just below analysts' forecasts of $1.42 billion. Earnings per share came in at $1.27, which also fell short of the $1.29 Wall Street had expected. Company management pointed to the ongoing "softness in the domestic economy" and a "prolonged freight downturn" as the primary reasons for the disappointing results. The weaker performance occurred amid a challenging macroeconomic backdrop for the logistics industry, which weighed on investor sentiment.
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