Deutsche Bank Maintains Buy On Shares Of Swift Transportation, $30 PT


In a research report issued today, Deutsche Bank analyst Robert Salmon maintained a Buy rating on Swift Transportation (NYSE:SWFT) with a price target of $30.00.

Salmon wrote, “Yesterday after the close, SWFT reported Q3 adjusted EPS of $0.39/share, which was above our estimate of $0.36 and Consensus of $0.35. Upside was driven by $0.03/share of lower-than- expected effective income tax rate (32.3% vs. DBe of 38.5%) though earnings were also aided by $0.02/share of higher-than-expected gains on sales of used equipment so the quality of the beat was not as good as the print implies. However, we believe the stock will trade higher today following its updated 2014 adjusted EPS guidance of $1.29-1.33 (which implies Q4 EPS of $0.45- 0.49 (vs. DBe of $0.50 and Consensus of $0.47), which is better than the Buyside feared) and improving truck productivity (revenue/tractor/week, net of fuel) trends, which increased 7.4% y/y last quarter. We note that Q4 guidance incorporates $2-4 million of gains on sales of used equipment next quarter and a 38.5% effective tax rate. SWFT also issued 2015 EPS guidance of $1.62-1.72 (vs. DBe of $1.75 and Consensus of $1.65), which is based on 10-15% operational improvements y/y and $0.18-0.19/share savings from its refinancing and debt retirement activities. We expect the stock to trade higher on the report and management’s positive outlook as the stock is simply too cheap at just 12.8x our 2015 EPS estimate of $1.75 (or 13.4x the midpoint of company guidance). BUY.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Robert Salmon has a total average return of 8.4% and a 100.0% success rate. Salmon is ranked #2185 out of 3343 analysts.

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