What Happened?
Shares of freight carrier Old Dominion (NASDAQ: ODFL) jumped 5.3% in the afternoon session after analysts from both Stifel and Goldman Sachs raised their price targets on the company's shares.
Stifel increased its price target to $228 from $217 and kept a Buy rating on the stock. The firm's analyst also noted that they expected overall Q1 less-than-truckload earnings to be slightly better than expected, even as volume growth remained slow. Separately, Goldman Sachs also expressed a positive view, adjusting its price target on Old Dominion to $198 from $195 while maintaining its Buy rating. These actions signaled confidence in the company's outlook from financial analysts.
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What Is The Market Telling Us
Old Dominion Freight Line’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 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.
Old Dominion Freight Line is up 36% since the beginning of the year, and at $216.49 per share, has set a new 52-week high. Investors who bought $1,000 worth of Old Dominion Freight Line’s shares 5 years ago would now be looking at an investment worth $1,722.
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