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Valued at a market cap of around $41 billion, Old Dominion Freight Line, Inc. (ODFL) operates as a less-than-truckload (LTL) motor carrier that offers regional, inter-regional, national LTL services, and expedited transportation services. The Thomasville, North Carolina-based company also offers a range of value-added services, including container drayage, truckload brokerage, and supply chain consulting, and is expected to announce its fiscal Q3 earnings results before the market opens on Wednesday, Oct. 23.
Ahead of this event, analysts project the transportation company to report a profit of $1.46 per share, down 5.2% from $1.54 per share in the year-ago quarter. However, the company has consistently surpassed Wall Street's bottom-line estimates in each of the last four quarters. In Q2, the company reported an EPS of $1.48, which topped the consensus estimates by almost 2.1%.
For fiscal 2024, analysts expect ODFL to report an EPS of $5.62, a marginal decline from $5.63 in fiscal 2023. Nonetheless, EPS is expected to grow 14.4% year-over-year to $6.43 in fiscal 2025.
Shares of ODFL have declined 7% over the past 52 weeks, significantly lagging behind both the S&P 500 Index's ($SPX) 33.5% surge and the Industrial Select Sector SPDR Fund’s (XLI) 34.4% return over the same period.
ODFL’s underperformance is primarily driven by an overall decline in the demand for freight services, leading to low shipment volumes and rates coupled with increasing capital expenditure and operating expenses of the company, hurting its bottom line.
Yet, shares of ODFL recovered marginally on Jul. 24, following its Q2 earnings release, as its revenue grew 6.1% year-over-year to $1.5 billion and met the Street forecasts. This was fueled by a 4.4% increase in LTL revenue per hundredweight and a 1.9% increase in LTL tons per day. The company’s 11.3% year-over-year surge in EPS to $1.48, while beating the consensus estimates, further enhanced investor confidence.
However, on Sep 5, the stock fell 4.9% due to investor pessimism surrounding the company’s updated financial forecasts for August 2024, which revealed a 5.2% drop in daily revenue compared to last year.
Analysts' consensus view on Old Dominion Freight Line’s stock is cautious, with a "Hold" rating overall. Among 19 analysts covering the stock, five recommend a "Strong Buy," one suggest "Moderate Buy," 11 recommend “Hold,” and two indicate a “Strong Sell” rating. The average analyst price target for ODFL is $196.28, indicating only a 2.1% potential upside from the current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
