- JPMorgan analyst Brian Ossenbeck downgraded US Xpress Enterprises Inc (NYSE:USX) to Underweight from Neutral without a price target.
- Ossenbeck mentions that the company's execution continues to trail peers while strategic initiatives add to the near-term headwinds in truckload and brokerage.
- The analyst says U.S. Xpress's recent setback of the transition to the Variant digital fleet will make it difficult for management to maintain its fleet growth objective in an increasingly competitive market for experienced drivers.
- He believes U.S. Xpress will trade at a discount to the group given the uncertainty around the earnings power of the model.
- Recently, the company reported fourth-quarter operating revenue growth of 16.7% year-over-year to $531.61 million, beating the consensus of $526.03 million.
- Adjusted EPS declined to $(0.03) from $0.15 a year ago, missing the consensus of $0.10.
- The company says consolidated earnings were disappointing primarily due to operational challenges at Variant that were negatively impacting its ability to scale profitably.
- At the end of the quarter, the company had $188.9 million of liquidity, $369.8 million net debt, and $276.6 million of total stockholders' equity.
- Price Action: USX shares closed lower by 15.84% at $3.72 on Thursday.
