Multiple Upgrades A group of equity analysts raised their targets for TFI International Inc.(TFII-N, TFII-T) in response to the release of in-line first-quarter results, seeing encouraging signs from the Quebec-based transportation and logistics services company’s guidance.
On Wednesday, TFI reported EBITDA and earnings per share of US$170-million and US72 cents, matching the consensus projections on the Street.
Concurrently, he raised its 2021 guidance for 2021, which included the expectation of 7 months of contributions from its blockbuster deal for UPS Freight, the less-than-truckload and dedicated truckload divisions of United Parcel Service, Inc. , to a range of US$3.80 to US$4.00. The Street had expected US$3.76 previously.
“While Q1 was largely in-line, the key takeaways from the quarter were: 1) management’s confirmation of the tight capacity and strong pricing trends in the trucking sector (which bodes well for the repricing of the UPS Freight acquisition set to close this quarter); and 2) the solid 2021 guide, which includes a 7 month contribution from the UPS Freight transaction and confirming the encouraging (and early) contribution from that acquisition. We continue to see meaningful upside in the shares as execution on the acquisition builds,” said RBC Dominion Securities analyst Walter Spracklin.
He raised his target for TFI shares to US$98 from US$86 with an “outperform” rating. The average on the Street is currently US$90.90.
Others making changes include:
* BMO’s Fadi Chamoun to US$95 from US$84 with an “outperform” rating.
“We also see upside to company 2021 guidance of $3.80-$4.00 EPS,” said Mr. Chamoun. “TFII should benefit from several earnings/cash flow growth levers over the coming two years: (1) industrial economic recovery to which TFII has significant exposure; (2) continued strength in consumer end markets; (3) self-help opportunity from improving performance of acquired businesses including UPS Freight and DLS; (4) modest leverage and strong FCF to redeploy in small-medium-size acquisitions.”
* CIBC’s Kevin Chiang to US$95 from US$86 with an “outperformer” rating.
* Credit Suisse’s Allison Landry to US$102 from US$92 with an “outperform” rating.