On Thursday, Evercore ISI adjusted its financial outlook for Schneider National (NYSE: SNDR) shares, reducing the price target from $27.00 to $26.00 while keeping an In Line rating on the shares. This change follows Schneider National's third-quarter earnings report, which revealed an adjusted earnings per share (EPS) of $0.18. The results fell below both Evercore ISI's projection of $0.24 and the average estimate of $0.23 expected by the Street.
The company's earnings were impacted by weaker performance in the Truckload and Logistics segments. Operating income for these units did not meet expectations, primarily due to softer revenue contributions.
Despite a strong start to the quarter in July, a counter-seasonal decline in business from mid-August through September hindered improvements in revenue per truck per week—a key metric for Truckload pricing—and prevented the Network portion of the Truckload business from turning a profit.
In light of the third quarter's underwhelming performance, Schneider National has revised its full-year 2024 EPS guidance downwards to a range of $0.66 to $0.72, a decrease from the previously forecasted range of $0.80 to $0.90.
The company anticipates only moderate seasonal trends to occur in the fourth quarter. Consequently, Evercore ISI has also lowered its fourth-quarter 2024 EPS estimate for Schneider National to $0.19 from $0.27 and reduced the full-year 2025 EPS forecast to $1.00 from $1.30.
The firm noted that fundamentals remain challenging for the Truckload and Logistics segment. The revised price target reflects these ongoing headwinds without taking into account the tariff spikes from the previous day. Evercore ISI continues to apply trough-level multiples, which consider the current challenges faced by the industry, in their valuation of Schneider National's stock.
In other recent news, Schneider National Inc (NYSE:SNDR). reported stable revenues of $1.2 billion in its Third Quarter 2024 Earnings Conference Call, despite a slight dip in adjusted diluted earnings per share from $0.20 to $0.18.
The company anticipates a stronger fourth quarter, predicting improved market conditions and seasonal effects. Schneider also revised its full-year 2024 adjusted diluted EPS guidance to $0.66 to $0.72, reflecting strategic growth plans.
Notably, the company's Truckload segment revenues experienced a 1% decline to $532 million due to lower network volumes, while Logistics revenues decreased by 4% to $314 million. On a positive note, Intermodal revenues saw a minor increase to $265 million.
The company also continued its share repurchase program with $4 million in purchases and has a remaining $54 million from a $150 million authorization. These recent developments indicate Schneider's commitment to shareholder returns, strategic growth, and operational efficiency.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Schneider National's financial position and market performance. Despite the challenges highlighted in the article, the company's stock has shown significant momentum, with a 38.49% price total return over the past six months. This aligns with an InvestingPro Tip indicating a "significant return over the last week" and that the stock is "trading near 52-week high."
However, investors should note that the company's P/E Ratio (Adjusted) stands at 54.7, which is relatively high. This is consistent with an InvestingPro Tip suggesting that SNDR is "trading at a high earnings multiple." This valuation metric may be a point of concern, especially given the downward revision of earnings estimates mentioned in the article.
On a positive note, Schneider National has maintained its dividend growth, with an InvestingPro Tip highlighting that the company "has raised its dividend for 3 consecutive years." The current dividend yield is 1.25%, which may provide some appeal for income-focused investors despite the challenging business environment described in the report.
For those seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Schneider National, providing a deeper understanding of the company's financial health and market position.
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