On Monday, UBS has adjusted its outlook on TFI International (NYSE:TFII), a leading transportation and logistics company. The firm lowered its price target on the company's shares to $163 from the previous $175 while maintaining a Buy rating on the stock. This revision follows TFI International's first-quarter earnings report, which revealed earnings per share (EPS) of $1.24, falling short of both UBS's estimate and the consensus of $1.39.
TFI International's total revenue excluding fuel surcharge reached $1.6 billion, aligning with UBS's expectations. However, the company's operating ratio—a measure of efficiency where a lower percentage indicates better performance—across all business segments did not meet UBS's forecasts. Notably, the Package and Courier and Logistics segments reported negative earnings before interest and taxes (EBIT) variances of $6 million and $7 million, respectively, compared to UBS's model.
In the Truckload division, revenue surpassed UBS's projections, coming in at $400 million versus the anticipated $392 million. Despite this higher revenue, the segment's operating ratio of 89.6% was not as favorable as the 88.5% UBS estimated, resulting in an 8% decrease in operating income.
The Less-Than-Truckload (LTL) segment in Canada posted first-quarter operating income that was consistent with UBS's expectations. However, the U.S. LTL segment's operating income was 5% lower than forecasted due to an operating ratio of 92.6%, which was 40 basis points worse than expected.
UBS's revised price target reflects the company's recent performance and operating challenges experienced in the first quarter. The firm continues to endorse TFI International as a Buy, indicating a positive outlook on the stock despite the recent adjustments to financial expectations.
InvestingPro Insights
As TFI International navigates through its recent operational challenges, real-time data and analysis from InvestingPro provide additional context for investors. With a market capitalization of $11.63 billion and a P/E ratio standing at 24.06, the company's valuation metrics are noteworthy. TFI International's price-to-book ratio, a gauge of market valuation, is on the higher side at 4.49 as per the last twelve months ending Q1 2024, suggesting a premium on the company's net asset value.
Revenue trends indicate a slight quarterly uptick of 1.12% in Q1 2024, although there has been a notable decline of 10.97% over the last twelve months. Despite this, the company's gross profit margin remains solid at 21.31%, reflecting the efficiency of its operations in generating profit from sales. Moreover, TFI International has upheld its commitment to shareholders, maintaining dividend payments for 23 consecutive years, with the dividend yield currently at 1.16% and a recent growth of 14.29% in dividends.
InvestingPro Tips highlight that the stock is currently in oversold territory according to the RSI, which could interest value-seeking investors. Additionally, it's important to note that while some analysts have revised their earnings expectations downwards for the upcoming period, the company is still predicted to be profitable this year and has been profitable over the last twelve months. For investors looking for a deeper dive into TFI International's performance and future prospects, InvestingPro offers several more tips to consider. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and unlock the full suite of insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.