What Happened?
Shares of freight delivery company Knight-Swift Transportation (NYSE: KNX) jumped 4.8% in the afternoon session after a Bank of America analyst raised the company's stock price target, citing improving supply dynamics in the trucking industry.
The positive analyst commentary came a day after Knight-Swift reported mixed first-quarter results. While the freight delivery company's revenue of $1.85 billion was in line with expectations, its adjusted profit of $0.09 per share missed analyst forecasts. The company’s guidance for the second quarter, however, was roughly in line with what analysts were expecting. The improved outlook may also have been supported by broader industry trends, as reports indicated a developing driver shortage was causing spot truckload rates to rise, which could benefit freight companies.
After the initial pop the shares cooled down to $66.78, up 4.4% from previous close.
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What Is The Market Telling Us
Knight-Swift Transportation’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 5.3% on the news that several Wall Street analysts upgraded their ratings and raised their price targets on the company's shares, fueling investor optimism.
The positive sentiment followed an upgrade from Evercore ISI to 'Outperform,' which cited improving fundamentals and signs of earnings recovery within the trucking sector. UBS also upgraded the stock to 'Buy' from 'Neutral,' noting a tightening in truckload supply and higher spot rates. Further reinforcing the bullish outlook, Benchmark raised its price target to $70, JPMorgan increased its target to $65, and Stifel lifted its target to $63. This wave of positive analyst ratings helped push the stock to a new all-time high.
Knight-Swift Transportation is up 27.9% since the beginning of the year, and at $66.78 per share, has set a new 52-week high. Investors who bought $1,000 worth of Knight-Swift Transportation’s shares 5 years ago would now be looking at an investment worth $1,429.
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