Old Dominion Freight Line trades higher after Wells Fargo upgrades on confidence in trucking upside
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Wells Fargo upgraded Old Dominion Freight Line (NASDAQ:ODFL) to an Overweight rating after having the trucking stock set at Equal Weight.
The firm made the bullish call after visiting with ODFL management and touring a terminal.
Analyst Allison Poliniak-Cusic: "We walked away from our meeting more constructive and confident about the LTL freight environment and ODFL's growth opportunity within that market."
The positive vibe extended beyond industrial end-markets with the read being that consistent strong demand is still being seen broadly.
ODFL's specific end markets are noted to have continued to show strength and the truckload shipping company is seen benefiting as it continues to provide a level of service which is expanding its market share in the LTL market.
Looking ahead, the LTL industry is seen growing 3X to 4X over the longer term. ODFL's earnings growth profile is expected to continue to strengthen and further upside is seen for shares as continued strength in both freight volumes and yields runs parallel to strong operating discipline.
Wells Fargo assigned a price target of $325 to ODFL, which is based on a higher 24X to 25X multiple on the increased FY23 estimates.
Shares of Old Dominion Freight Line (ODFL) gained 1.77% in early trading on Monday.
Read the most recent breakdowns on ODFL from Seeking Alpha authors.