Goldman Sachs has upgraded its rating on Knight-Swift (KNX, Financial) from Neutral to Buy, raising the price target significantly from $45 to $65. The firm has adjusted its investment outlook, now showing a preference for the trucking industry while adopting a more balanced perspective on the rail and rail-adjacent sectors. Despite existing risks such as tariffs and potential impacts on consumer demand and global freight flows, Goldman Sachs suggests increasing exposure to transportation stocks like (KNX) in anticipation of the upcoming earnings upgrade cycle.
The investment strategy proposed is to invest when fundamentals are under maximum pressure. Goldman Sachs highlights that the underperformance of trucker stocks, coupled with an analysis indicating freight recovery, implies that the current stock prices of (KNX, Financial) offer substantial return potential amidst the prevailing risks.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Knight-Swift Transportation Holdings Inc (KNX, Financial) is $50.96 with a high estimate of $68.00 and a low estimate of $42.00. The average target implies an upside of 14.98% from the current price of $44.32. More detailed estimate data can be found on the Knight-Swift Transportation Holdings Inc (KNX) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Knight-Swift Transportation Holdings Inc's (KNX, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Knight-Swift Transportation Holdings Inc (KNX, Financial) in one year is $57.73, suggesting a upside of 30.26% from the current price of $44.32. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Knight-Swift Transportation Holdings Inc (KNX) Summary page.
KNX Key Business Developments
Release Date: April 23, 2025
- Revenue (Excluding Fuel Surcharge): Increased by 1.2% year-over-year.
- Adjusted Operating Income: Improved by 68.2% or $35.1 million year-over-year.
- GAAP Earnings Per Diluted Share: $0.19 for the first quarter of 2025.
- Adjusted EPS: $0.28 for the first quarter of 2025.
- Consolidated Adjusted Operating Ratio: 94.7%, a 210 basis point improvement from the prior year.
- Truckload Revenue (Excluding Fuel Surcharge): Decreased by 4.2% year-over-year.
- Truckload Loaded Miles: Declined by 5.4% year-over-year.
- Revenue Per Loaded Mile (Excluding Fuel Surcharge): Increased by 1.5% year-over-year.
- LTL Revenue (Excluding Fuel Surcharge): Grew by 26.7% year-over-year.
- LTL Shipments Per Day: Increased by 24.2% year-over-year.
- Logistics Revenue: Increased by 11.8% year-over-year.
- Intermodal Revenue: Increased by 3.5% year-over-year.
- Guidance for Second Quarter 2025 Adjusted EPS: Projected to be in the range of $0.30 to $0.38.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Knight-Swift Transportation Holdings Inc (KNX, Financial) reported a 68.2% year-over-year improvement in adjusted operating income, showcasing strong financial performance.
- The company's LTL segment experienced a 26.7% increase in revenue, driven by a 24.2% rise in shipments per day, indicating robust growth in this area.
- The Truckload segment achieved a 1.5% increase in revenue per loaded mile, marking the first year-over-year increase in this metric in 10 quarters.
- Knight-Swift Transportation Holdings Inc (KNX) successfully reached a quarterly operating profit for the US Express Truckload business for the first time since its acquisition in July 2023.
- The company is investing in new technology and enhancing safety measures, which are expected to improve operational efficiency and reduce costs.
Negative Points
- Severe weather conditions in February led to a slowdown in volumes, impacting the company's performance early in the quarter.
- The uncertainty surrounding toxic tariffs and fluid trade policies has created a cautious tone among shippers, affecting market momentum and volume growth.
- Knight-Swift Transportation Holdings Inc (KNX) has adjusted its earnings guidance for the second quarter, reflecting a more conservative approach due to market uncertainties.
- The company's Intermodal segment faced a competitive bid season, leading to a decrease in revenue per load and impacting profitability.
- The LTL segment experienced cost headwinds due to inefficiencies in the DHE region and startup costs at newly opened facilities, resulting in a decline in adjusted operating income.
